News

PPP and the future of the railways.

14th April 2021

François Davenne, Director General of the International Union of Railways (UIC) was interviewed by Howard Rosen, RWG Chairman, earlier this month for the Saudi Rail 2021 Conference.

The title of the interview was “Investment opportunities and PPP for the future of the transport and railway sector” but Mr Davenne talked in detail about the way that future private financings could be a welcome catalyst for the rail industry to take a more standardised and integrated approach to the technical operation of the rail sector which in turn would help avoid what he called the “cost of incompatibility”. There was no uniform answer, he said, to the question of whether the best PPP rolls infrastructure, operations and rolling stock into one vehicle or it is best to separate out the various areas of finance but government oversight either way is essential. In particular Mr Davenne, a former head of OTIF, agreed that the Luxembourg Rail Protocol plays an important role in supporting the move towards common standards. There can be a virtuous circle, he said, where private capital will be more willing to invest in rolling stock when it is easy to recover and redeploy financed assets and on the other hand is less likely to invest and take risk where the equipment is highly specialised for only one system. An integrated, standardised, homogenised rail network, he added, will be easier to finance with private capital, delivers a more cost effective product and ultimately happier, and more, customers.

You can see the interview here.