23 maart 2006

Multi Annual Infrastructure Planning

Twinning project, Tuesday 28 March 2006, Ljubljana

By Henk Schutte, Ministry of Transport, The Netherlands

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Ministry organogram

Central Services

Inspectorate of V&W

DG Public Works

& Water Management

DG Freight Transport

and Aviation

DG Passenger Transport

DG Water

Secretary-General

Deputy Secretary-General

Minister

State Secretary

1000supervision implementati

on

8000

Policy

150 200 100

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DG Passenger Transport

DG Passenger Transport

Railway Directorate

Road Directorate

Water Directorate

Pol I cy

Rail infra manager ProRail

Rijkswaterstaat (Road Agency)

Execution

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Content of Presentation

• Institutional setting• Facts and figures• Actual Policy• Policy process (priorities)• Maintenance (more details)• Managing performance• Multi-annual planning

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Relationship State-ProRail

• ProRail is rail infra structure manager• ProRail: Private company• State is only shareholder• Legislative framework: Act on Railways• Management Concession ProRail

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Institutional triangle

• State• ProRail (Maintenance, capacitymanagement,

Traffic Control)• Railway Operators (passenger and freight)• EC-directives

MoT

NSProRailFreight Operators

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Funding of ProRail

• Annual subsidy for maintenance• Subsidies for new infrastructure (projects)• Infrastructure charge• Third party revenues

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Dutch railway infra structure: Facts and figures (1)

• 6500 km rail (2004)• 2800 length of network• 4500 km of catenary• 4500 bridges and tunnels• 3000 secured cross overs• 9000 switches• 9800 signalling poles• 386 stations

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National Rail Network

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Dutch railway transportation: Facts and figures (2)

• 128 mln train kilometers (per year) • 5000 passenger trains (per day)• 230 freight trains (per day)• 1 mln passengers (per day)• 80.000 tonne freight (per day)

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MoT: Setting the policy priorities

• Prioritisation of railway infrastructure investment projects according to MIT-rules

• Prioritisation of railway infrastructure maintenance according to output results

• Multi-annual budget for funding ProRail

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MoT: Actual Policy

• National mobility plan• Decreasing budgets for new infrastructure• Increasing budgets for maintenance• “Railinfrastructure Recovery plan”

!

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Consequences of former policy - ‘Lessons learned’

• Too much focus on new infra structure• Absorption budgets by mega projects• Limited budgets for maintenance• Backlog in maintenance • RAMS problems• Unsatisfied railway operators and

passengers

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Railway infra structure: Available budget

• New infrastructure 2006-2010 € 4,5 (billion)

• New infrastructure 2011-2014 € 1,9• New infrastructure 2015-2020 € 0,1• Total new infrastructure € 6,5• Maintenance 2006-2010 € 6,9• Maintenance 2011-2014 € 4,4• Maintenance 2015-2020 € 9,0• Total Maintenance € 20

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ProRail: Facts and figures financial

• Total Costs Maintenance * € 1200 mln

• Infra Structure Charge € 200 mln

• Annual MoT subsidy € 1000 mln

* Management, Current & capital maintenance, renewal, interest, depreciations, overhead, other.

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MIT- model: Phases and decision moments

Exploration of problem

Planning of infrastructure

Realisationphase

1. Intakedecision

2. Yes/no planning phase

3. Project decision

4. Implementing order

5. Completion

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Decision making process (Stakeholders)

• Realization policy goals• Political influence• Economical Costs and benefits• Regional policy (Provinces and local

authorities)• Wish list railway operators• Wish list rail infra manager ProRail• Interests of societal organisations• Interests of citizens

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Decision making processes on railway infrastructure: the policy arena

MIT

ProRail

Provincesparliament

Railway operators

Munici palities Citizens

Societal organisations

MoT: Railway Directorate

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Prioritising Railway Maintenance

• Long term budget based on agreed upon results (KPI’s)

• ProRail responsibly for selecting means (activities) to obtain the results

• State influence on rail infra management operation limited to ‘political sensitive dossiers’(for example accessibility)

• Maintenance agreements between the MoT and ProRail contain renewals as well

• Planning & control includes audits/benchmarks.

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Measuring the results: Key Performance Indicators (KPI’s)

• Reliability (Disruptions, Irregularities, Function restore time)

• Availability (train free periods, the avoidance of speed restrictions!)

• Quality (Renewal, Life Cycle Management)• Safety (percentage of travellers, which

feel safe at day / night ,the amount of train collisions and the death toll)

• Properness (the amount of travellers that judges stations to be sufficient clean)

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21Working with the MIT in the Railway Sector – lessons learned

• Long term planning important for efficient operation (LCM) and increasing reliability and utilisation (performance)

• Overview of long term effects and performance necessary for securing long term budget

• Golden rule: less budget = less performance (exception: efficiency).

• Transparant decision making based on integrated approach.

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Content Afternoon presentation

• Setting policy priorities in more detail (the National Mobility Plan)

• From performance to budget• Relationship Multi Annual budget and

annual management plan• Multi Annual budget and changes in

policy• Conclusions

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Setting policy priorities

• The National Mobility Plan (2011-2020)

- Retain current rail maintenance level within few years (renewal plan)- Improving quality and preparing for future local growth- Punctuality from 83% in 2003 to 89-91% in 2020.- Limited expanding of the network

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From Performance tot budget

• Performance targets as agreed upon in the National Mobility Plan

• Decision making process based on performance-cost scenario’s

• Multi-annual budget (MIT) is based on the costs of the national mobility plan

• Efficiency improvement is part of the budget

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Railway infra structure: Available budget

• New infrastructure 2006-2010 € 4,5 (billion)

• New infrastructure 2011-2014 € 1,9• New infrastructure 2015-2020 € 0,1• Total new infrastructure € 6,5• Maintenance 2006-2010 € 6,9• Maintenance 2011-2014 € 4,4• Maintenance 2015-2020 € 9,0• Total Maintenance € 20

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Multi Anual Overview

• Handout

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Multi Annual Budget and Annual Management Plan

• Multi Annual Budget (MIT) based on National Mobility Plan

• Annual Subsidy based on annual management plan

• Annual management plan includes renewal.

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Annual Management Plan (1)

• ProRail responsible for annual management & maintenance plan

• The plan has to be in line with performance agreed upon in MIT and national mobility plan

• ProRail responsible for selecting means tot obtain goals( Performance)

• MoT has to approve the management plan

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Annual Management Plan (2)

• The annual management & maintenance policy must be in line with the Multi-Annual budget

• Annual MoT subsidy based on annual Management Plan

• Deviations from the plan have to be agreed upon and can change the annual subsidy

• Differences between subsidy and realised costs have to be explained by ProRail

• Differences will be part of the result or balance sheet of ProRail

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Mutli Annual Budget and changes in policy (1)

• Right to approve the (multi annual) budget by the parliament

• New government can always change priorities and budget

• A change in policy starts with the discussion about the goals

Budget follows performance !

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Mutli Annual Budget and changes in policy (2)

• Consequences for Life Cycle costs and efficiency

• Changes in policy difficult on short term (2006-2010), possible on mid term (2011-2014) and likely on long term (2015-2020)

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Case: What if there’s less budget available

• Step 1: Define policy priorities (MoT)• Step 2: Change maintenance Plan in line

with these priorities (ProRail)• Step 3: Overview of effects (ProRail)• Step 4: Scenario’s for decision-making in

terms of costs & budget) and benefits & performance (MoT).

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Conclusions (1)

• Multi Annual Budget provides stability for ProRail: relative secure budget.

• Multi Annual budget provides stability for MoT: less claims, less surprises, stability in performance.

• Multi Annual Performance and Multi Annual Budget are two sides of same coin!

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Conclusions (2)

• Multi annual planning provides opportunity for optimizing life cycle costs

• Performance planning demands knowledge of and transparancy in relationship between performance, activities and costs

• Multi Annual Performance Policy necessary for securing Multi Annual budget

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Any questions?