Analysis of the passenger transport market
According to data published as at 31 August 2016 by the Office of Rail Transport (UTK), in 2015 railway passenger carriers noted growth in comparison to the previous year, both in terms of the number of passengers carried (by 4.83%), and transport labour (by 9.47%). During the first seven months of 2016, 171 290 thousand passengers were carried. In the same period transport service amounted to 11 016.44 million passenger-kilometres (pkm). To compare – in the analogous period of 2015 the numer of passengers carried was 163 020.00 thousand and 9 972.80 million pkm were travelled. The highest share of carriers according to the numer of passengers carried from January to July 2016 was that of Przewozy Regionalne (27.16%), followed by Koleje Mazowieckie (20.49%), PKP SKM (14.42%), PKP Intercity (12.61%) and finally SKM Warszawa (8.89%). In turn, the largest players in terms of transport distance covered in that period included PKP Intercity (48.19%), Przewozy Regionalne (22.90%), Koleje Mazowieckie (11.38%), PKP SKM (5.8%) and Koleje Śląskie (3.22%).
July 2016 alone was a real success for passenger transport. In that month 25 430 thousand passengers were carried. It was 10.45% more than in June of the preceding year (23 020 thousand passengers). Travel distance also increased by 10.82%: from 1 792.58 million pkm to 1 986.52 million pkm. In total in 2016 passenger transport services were provided by 16 licensed carriers. The Office of Rail Transport noted down a growth in the market of passenger carriages in 2016 both in terms of the number of passengers and kilometers travelled. The carriers provided their services to 292.4 million customers, that is, 4.3% more than in 2015. On the other hand, 19.2 billions pass km corresponded to a 9.9% increase.
Focus on speed and comfort
Railway passenger carriers in Poland observe the market and monitor the needs of their customers on an ongoing basis. In 2015, like never before, they intensified their activities to reduce the travelling time and improve passenger comfort. To make it feasible, they invest in buying new or modernising the existing rolling stock and in providing training in professional customer service to their employees.
However, skipping judgements on whether the purchase made by PKP Intercity Express InterCity Premium (EIP, Pendolino) was reasonable, the fact that EIP was included in the new timetable in December 2014 reduced the travelling time between Warsaw and Gdańsk. Now it takes 2h 39 minutes only, and the route from Warsaw to Kraków can be covered in 2h 18 minutes. From January to October 2015 EIP carried 3 million passengers. In total by theend of the year Pendolino service was used by about 3.5 million passengers. And this is not the end. PKP Intercity boasts that in October 2015 the company recorded the best transport result in 4 years, since the number of passengers had increased by 36%. It means that the carrier was selected by nearly 26 million passengers in total. The number exceeded the figures recorded in the analogous period of the previous year by more than 4 million. The interest in travelling by PKP Intercity has been still increasing. In 2016 as many as 38.5 million passengers used the carrier's services, which corresponds to a growth by ca. 7.3 million compared to 2015 (by 24%).
However, having introduced EIP vehicles, PKP Intercity continued to expand its rolling stock. The carrier ordered 20 modern electric multiple units (EMU) Flirt3 from the Stadler–Newag consortium. The vehicles have been running since 13 December 2015 (when the new timetable was introduced) on the following routes: Warsaw–Bydgoszcz, Olsztyn–Kraków (via Warsaw and Kielce), Gdynia–Katowice (via Łódź and Bydgoszcz) and Kraków–Szczecin (via Łódź, Kutno and Poznań). The vehicles ordered by the carrier are the economic class of Intercity. According to data provided by PKP Intercity as at 12 December 2016, Flirt3 trains travelled to more than 60 cities in Poland over a distance longer than ca. 19 thousand km every day. Since they were put into operation, they have travelled 13 thousand times over a total distance of 6.5 million km. During the first year Flirt3 trains carried more than 3.2 million passengers.
The new timetable also includes 20 PESA Darts (type 43WE, series ED161) operated by PKP Intercity. The media call them the “Polish Pendolino”. EMUs run on the following routes: Jelenia Góra–Wrocław–Łódź–Warsaw–Białystok/Lublin and Białystok/Lublin–Warsaw–Koluszki–Częstochowa– Katowice–Bielsko–Biała. PKP Intercity also invests in rail carriages. The carrier has modernised 218 units and intends to refurbish the entire rolling stock. Jakub Karnowski, President of PKP S.A., who resigned from his position on 30 November 2015, and a member of the management board Piotr Ciżkowicz, mentioned in their farewell speech that PKP Intercity closed the year 2015 with ca. 70% of new or modernised rolling stock.
Modern, comfortable rolling stock is also the objective of Przewozy Regionalne (PR) – the
largest railway passenger carrier in Poland. On average, nearly 1600 trains of this carrier depart each day. Przewozy Regionalne provides its services to, on average, 220 thousand people on a daily
basis. In the middle of November 2015 the first trains modernised by the company appeared on the tracks.
Such investments would be impossible but for the repayment of debts and a company restructuring plan. To save Przewozy Regionalne from “catastrophe”, the Industrial Development Agency (ARP) purchased 51% of the carrier’s shares for PLN 770 million. This way, PR was able to repay its debt of PL 600 million and start planning investments, mainly in rolling stock. Over the coming three years the company plans to modernise more than 200 trains.
The first modernised electric multiple unit out of 21 vehicles ordered from the consortium formed by PESA and ZNTK Mińsk Mazowiecki could be admired at International Railway Fair TRAKO 2015 in Gdańsk.
New rolling stock for faster and more comfortable long-distance journeys has also been ordered by Koleje Mazowieckie. The carrier, encouraged by the success of the seasonal train “Słoneczny” decided to launch additional weekend runs between Warsaw and Gdynia and Kraków. According to the new timetable, on 19 December 2015 the first modern train, also called “Słoneczny”, consisting of double-decker carriages, departed from Warszawa Zachodnia to Gdynia at 7.20 AM and “Dragon” departed from Warszawa Wschodnia to Kraków at 9.19 AM.
No delight about finance
The financial result in 2015 was similar to that recorded in the previous year. The management of the company explained that this was a consequence of long-term negligence and also multiple investments of PKP Intercity in rolling stock, mainly the purchase of Darts and Flirts. In 2016 the company generated the highest transport revenue in its history amounting to PLN 1.77 billion, that is, 24% more than in 2015. In addition, for the first time from many years the carrier has generated a positive result - profit of PLN 47 billion.
To compare – in 2015 it recorded a loss of PLN 56.8 million.
A past debt of several million zlotys is also a nightmare for the management of Przewozy Regionalne. In 2014 the carrier noted a loss of PLN 5.46 million, although,this loss was ten times smaller as minus PLN 26 million had been expected. He also explained that soon after the first six months of 2015 the operating profit of Przewozy Regionalne would amount to PLN 10 million but with regard to the company’s debt this year was also concluded in a loss. Przewozy Regionalne is waiting expectantly for the measurable results of the restructuring process. The company, as mentioned before, received a capital injection of PLN 770 million from ARP, which had been previously approved by the European Commission. Year 2016, for the first time in the company's history, was closed with a profit of PLN 54 million.
Local railway carriers, such as, for example, Koleje Śląskie, (Silesia) do much better. They informed that at the end of 2015 their financial resultwas better than previously assumed, that is, it exceeded PLN 2 million.
Przewozy Regionalne versus... regional?
Przewozy Regionalne has attempted to gradually implement the restructuring plan assuming, among other things, that long-term, most frequently5-year transport service contracts, will be concluded with local governments. Most marshals have already approved this solution; some of the mare still considering the pros and cons. However, many voivodeships doubt whether Przewozy Regionalne will be able to get up again. Some of the mimpute that despite the poor financial condition of the company it is favoured by the department of infrastructure and local governments and deemed, as the former minister of infrastructure and development Maria Wasiak claims, a public good. Therefore, Przewozy Regionalne is exposed to various forms of resistance from voivodeships and local carriers on a daily basis.
An example can be the idea of the marshal of Małopolskie voivodeship (Lesser Poland voivodeship) Marek Sowa, who in June 2015 offered to buy Przewozy Regionalne and incorporate it into Koleje Małopolskie. However, the plan was not implemented.
In addition, Przewozy Regionalne carries out litigation with Arriva RP — a carrier providing transport services in kujawsko-pomorskie (Kuyavian-Pomeranian) voivodeship. In November 2015 the Voivodeship Administrative Court issued a sentence that was favourable for Arriva. It referred to a transport service contract awarded to Przewozy Regionalnein this voivodeship by the local government without tender. Many times Arriva implied that the time limit by which the tender mode could have been changed into a non-tender one excluding other bidders had been exceeded. The authorities of the voivodeship have already announced the sentence will be cancelled.
National Railway Programme and the EU for the sake of passengers
In September 2015 the government adopted the National Railway Programme until 2023. For railway passenger transport it provides, among other things, for improved throughput of railway lines within the conurbation, and a better travelling time of trains compared to road transport. For instance, the plans include better connections between Warsaw and other regions as well as improved connections between voivodeship cities. For passengers this means even greater travel comfort, which is true for both connections inside and outside large metropolises.
Under the new EU perspective 2014-2020, as much as PLN 100 billion will be allocated to railways, of which PLN 67 billion will be to investments and the rest to the operation and maintenance of railway lines. For the time being only about 10% of the tracks make it possible for passenger trainst o run at 160 km/h, but in 2015 every month a two-digit increase in the number of passengers travelling by rail was observed. Investments will also cover modernisation of the railway infrastructure and of course the modernisation and purchase of new rolling stock by carriers.
Funds for further investment in the rolling stock in the regions in 2016——2020 will also be secured by the amendment of the Act on the Railway Fund which came into force on 6 August 2015. The amendment is a continuation of the act of 2009—2015. The level of support for voivodeship investments in the rolling stock was determined as PLN 110 million a year, and the largest beneficiary of these funds will be voivodeships that are in the poorest economic condition and that are most densely populated. According to preliminary estimates of the then department of infrastructure, the amount of annual financing for respective voivodeship will be: kujawsko-pomorskie (Kuyavian--Pomeranian) — ca. PLN 8.1 million; lubelskie (Lublin) — PLN 12.3 million; lubuskie (Lubusz) — PLN 5.7 million; łódzkie (Łódź) — PLN 5.5 million; małopolskie (Lesser Poland) — PLN 7.2 million; opolskie (Opole) — PLN 4.9 million;podkarpackie (Subcarpathian) — PLN 12.6 million; podlaskie (Podlasie) —PLN 7.9 million, pomorskie (Pomeranian) — PLN 3.3 million; śląskie (Silesian) —PLN 5.7 million; świętokrzyskie (Holy Cross) — PLN 8.9 million; warmińsko-mazurskie (Warmia and Masuria) — PLN 9.6 million, zachodniopomorskie (West Pomeranian) — PLN 8.4 million; wielkopolskie (Greater Poland) — PLN 55 thousand. This means that dolnośląskie and mazowieckie voivodeships will not be granted financing from the Railway Fund.