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Railway Engineering - UK - March 2017

Published By :

Mintel

Published Date : Mar 2017

Category :

Parts & Suppliers

No. of Pages : N/A

The largest rail infrastructure project over the next two decades is set to be the development of the national high speed rail network HS2. The hybrid bill, effectively the planning permission for the first phase of HS2, received Royal Assent in February 2017. Major enabling works contracts for the project were already awarded in 2016, while some £11.8 billion worth of civils contracts are due to be awarded in the early summer. A hybrid bill for phase 2b of HS2 (Crewe to Manchester and West Midlands to Leeds) is to be presented to parliament in 2019.

Table of Content

EXECUTIVE SUMMARY
The market
Crossrail and HS2 accounted for nearly a third of government funding for the railway industry in 2015/16
Figure 1: Government railway funding, 2012-16
Network Rail spending on renewal schemes is higher than the allowance set by rail regulator during the first two years of CP5
Figure 2: Rail renewal expenditure by asset, 2015/16
Network Rail encounters major difficulties in delivering enhancement schemes in 2014/15, prompting a review and re-plan of the programme
Spending on rail enhancements up by 10% in 2015/16
Average age of rolling stock rises to 21 years in 2015/16
Some 30 major rail projects currently in infrastructure pipeline
HS2 set to be the largest rail infrastructure project over the next two decades
Figure 3: Cost of enhancement projects during CP5, 2014/15-2018/19
Market factors
Network Rail’s funding and delivery outputs are agreed in five-year blocks called control periods
Increase in passenger journeys to drive investment in rail infrastructure and capacity
Recommendations set out in Shaw report could result in biggest shake-up of Network Rail since privatisation
Companies
What we think

KEY INSIGHTS
What are the key recommendations in the Shaw report, which looks into the future shape and financing of Network Rail?
What have been the key developments since the publication of Shaw report?
What are the key changes in the re-plan of the CP5 enhancement programme following Sir Peter Hendy’s Review in 2015?
How is the UK passenger rolling stock fleet expected to develop?

INTRODUCTION
Definitions
Methodology
Abbreviations
Market positioning

UK ECONOMY
Overview
Figure 4: UK GDP quarterly development, 2003-16
Figure 5: UK GDP in economic downturns and recoveries since 1979
Inflation
Interest rates
House prices
Figure 6: UK House price changes, 2004-16
Consumer spending
Manufacturing
Figure 7: UK manufacturing, 2014-16
Business investment
Figure 8: UK GFCF 2003-16
Imports
Exports

MARKET FACTORS
Key Points
Rail network funding and regulation
Sir Peter Hendy’s re-plan for Network Rail’s enhancement programme 2014-19
The Shaw report
Drivers of investment in rail industry
Railways Act 2005
High Speed Two (HS2) and proposed major schemes

RAIL FINANCE
Key Points
Overview
Figure 9: Government railway funding, by type, 2012-16
Figure 10: Private investment in railways, by type, 2012-16

INFRASTRUCTURE INVESTMENT
Key Points
Introduction
Figure 11: Rail infrastructure in Great Britain, 2012-16
Figure 12: Rail infrastructure in Great Britain, 2012-16
Figure 13: Major rail infrastructure projects delivered during CP4, 2009-14
Network Rail embarks on largest rail enhancement and investment programme in CP5 2014-19
Enhancement milestones in the first two years of CP5
Capital expenditure
Figure 14: Rail infrastructure renewals, enhancements & maintenance expenditure in Great Britain, 2011-16
Figure 15: Rail infrastructure renewals, enhancements & maintenance expenditure in Great Britain, 2012-16
Expenditure analysis
Figure 16: Renewal expenditure by asset, 2015 and 2016
Figure 17: Private sector investment in track and signalling, 2012-16
Figure 18: Private sector investment in stations, 2012-16
Figure 19: Analysis of enhancement expenditure in England and Wales, by type, 2010-14
Figure 20: Analysis of enhancement expenditure on non-PR08 funded schemes by type, 2010-14
Figure 21: Analysis of enhancement expenditure in Scotland, by type, 2010-14
Figure 22: Analysis of enhancement expenditure in Great Britain, by type, 2015-16

ROLLING STOCK
Key Points
Introduction
Figure 23: Average age of rolling stock, by sector, 2012-16
Figure 24: Average age of rolling stock, by sector, 2012-16
Figure 25: Average age of rolling stock, by company, 2012-16
Figure 26: Number of passenger journeys, by sector, 2012-16
Figure 27: Share of passenger journeys, by sector, 2015/16
Figure 28: Distance covered by freight trains, 2012-16
Figure 29: Rolling stock parc, as of March 2016
Capital expenditure
Figure 30: Private sector rolling stock investment in Great Britain, 2012-16
Figure 31: Private sector rolling stock investment in Great Britain, 2012-16

SUPPLY SOURCES
Key Points
Production
Overview
Hitachi and Bombardier Transportation only major train manufacturers with UK plants
Bombardier Transportation UK
Hitachi Rail Europe
CAF set to open UK assembly plant in 2018
Alstom also considering UK manufacturing if firm wins major UK contracts
UK production of rolling stock set for further growth
Figure 32: UK production of locomotives, rolling stock and other equipment, 2011-15
Segmentation
Figure 33: Segmentation of the UK production of locomotives, rolling stock and other equipment, by type, 2011-15
Imports
Overview
Figure 34: UK imports of locomotives, rolling stock and other equipment, 2012-16
Segmentation
Figure 35: Segmentation of UK imports of locomotives, rolling stock and other equipment, by type, 2012-16
Figure 36: UK imports of locomotives, rolling stock and other equipment, by type, 2016
Exports
Overview
Figure 37: UK exports of locomotives, rolling stock and other equipment, 2012-16
Segmentation
Figure 38: Segmentation of UK exports of locomotives, rolling stock and other equipment, by type, 2012-16

INVESTMENT PROFILES
Key Points
Introduction
Figure 39: Train operating companies, as of February 2017
Train Operating Companies
Abellio Greater Anglia
Figure 40: Key statistics for Greater Anglia, 2014-16
Arriva Trains Wales
Figure 41: Key statistics for Arriva Trains Wales, 2014-16
c2c
Figure 42: Key statistics for c2c, 2014-16
Chiltern Railways
Figure 43: Key statistics for Chiltern Railways, 2014-16
Cross Country
Figure 44: Key statistics for Cross Country, 2014-16
Virgin Trains East Coast (formerly East Coast)
Figure 45: Key statistics for Virgin Trains East Coast, 2014-16
East Midlands Trains
Figure 46: Key Statistics for East Midlands Trains, 2014-16
Eurostar
Govia Thameslink Railway (formerly First Capital Connect)
Figure 47: Key statistics for Govia Thameslink Railways, 2013-15
Great Western Railway
New fleet of Intercity Express Trains to be introduced from 2017
Great Western electrification project to be delayed
Figure 48: Key statistics for Great Western, 2014-16
First Hull Trains
Abellio ScotRail (formerly First ScotRail)
Figure 49: Key statistics for Abellio ScotRail, 2014-16
TransPennine Express
Figure 50: Key Statistics for TransPennine Express, 2014-16
Grand Central
Heathrow Connect
Heathrow Express
London Midland
Figure 51: Key statistics for London Midland, 2014-16
London Overground
Figure 52: Key statistics for London Overground, 2014-16
Merseyrail
Figure 53: Key statistics for Merseyrail, 2013-15
Northern Rail
Figure 54: Key statistics for Northern Rail, 2014-16
North Yorkshire Moors Railway
Southeastern
Figure 55: Key Statistics for Southeastern, 2014-16
South West Trains
Figure 56: Key Statistics for South West Trains, 2016
TFL Rail
Figure 57: Key Statistics for TFL Rail, 2014-16
Virgin Trains West Coast
New rail franchise to be introduced combining InterCity West Coast services with High Speed 2 services
Figure 58: Key statistics for Virgin Trains West Coast, 2014-16
West Coast Railway
Freight Operators
Colas Rail
Figure 59: Key statistics for Colas Rail, 2016
Direct Rail Services
Figure 60: Key statistics for Direct Rail Services, 2016
DB Cargo UK (formerly DB Schenker Rail)
Freightliner Group
Figure 61: Key Statistics for Freightliner in the UK, 2015
GB Railfreight
Figure 62: Key statistics for GB Railfreight, 2016
Mendip Rail
Rolling Stock Operating Companies
Angel Trains
Porterbrook Leasing Company
Eversholt Rail Group
QW Rail Leasing
Network Rail
London & Continental Railways/HS1
High Speed 2 Ltd

SUPPLY INDUSTRY STRUCTURE
Key Points
Industry Development
Hitachi starts production at new UK manufacturing plant in 2016, joining Bombardier as the country’s only rolling stock manufacturers
Spanish rolling stock manufacturer CAF plans to open UK assembly plant in 2018
Alstom also considering UK manufacturing if firm wins major UK contracts
Industry structure
Figure 63: Analysis of the changes in the structure of the railway & tramway rolling stock manufacturing industry, 2012-16
Structure by employment
Figure 64: Analysis of the employment structure of the railway & tramway rolling stock manufacturing industry, 2015-16
Structure by turnover
Figure 65: Analysis of the financial structure of the railway & tramway rolling stock manufacturing industry, 2015-16
Company profiles

ALSTOM TRANSPORT UK
Company strategy:
Figure 66: Financial analysis of Alstom Transport UK, 2014-16

BOMBARDIER TRANSPORTATION UK
Figure 67: Financial analysis of Bombardier Transportation UK, 2011-15
Company strategy and outlook:

AMEC FOSTER WHEELER
Rail business
Company outlook:
Figure 68: Financial analysis of AMEC Foster Wheeler, 2011-15

AMEY/AMEY RAIL
Company strategy and outlook:
Figure 69: Financial analysis of Amey UK, 2011-15
Amey Rail
Company performance:
Figure 70: Financial analysis of Amey Rail, 2011-15
ANGEL TRAINS
Figure 71: Financial analysis of Angel Trains, 2011-15
Company strategy and outlook:

BALFOUR BEATTY GROUP
Balfour Beatty announces several profit warnings during 2014 and 2015 amid major challenges from construction contracts
Recent rail sector developments
Figure 72: Financial analysis of Balfour Beatty, 2011-15
Figure 73: Financial analysis of Balfour Beatty by segment, 2014-15

KNORR-BREMSE GROUP
Figure 74: Financial analysis of Knorr-Bremse Rail Systems (UK), 2011-15
SIEMENS RAIL AUTOMATION HOLDINGS
Figure 75: Financial analysis of Siemens Rail Automation Holdings, 2011-15
Company strategy and review:

BABCOCK RAIL
Figure 76: Financial analysis of Babcock Rail, 2012-16
Company review and outlook:

NETWORK RAIL
Network Rail is delivering its biggest ever investment programme
Network Rail encounters major difficulties in delivering enhancement programme at the start of CP5
Figure 77: Financial analysis of Network Rail, 2012-16
Company review and outlook:

EVERSHOLT RAIL (UK)
Figure 78: Financial analysis of Eversholt Rail (UK), 2011-15

PORTERBROOK LEASING COMPANY
Recent company activity:
Company strategy:
Figure 79: Financial analysis of Porterbrook Leasing Company, 2011-15

HITACHI RAIL EUROPE
Intercity trains
Commuter
Figure 80: Financial analysis of Hitachi Rail Europe, 2012-16
Company strategy:

FORECAST
Key Points
Market size
ORR’s original funding settlement for CP5
ORR introduces new targets for Network Rail’s asset management for CP5
Move towards framework agreements during CP5
Sir Peter Hendy’s Review and re-plan for CP5 enhancement programme
Funding for CP5 enhancement schemes to be enhanced by £2.5 billion
Network Rail implements Enhancements Improvement Programme
The Bowe Review
The Shaw Report
Developments since the publication of the Shaw report
Infrastructure
Rail infrastructure projects pipeline
Figure 81: Rail infrastructure pipeline, 2017-21
Figure 82: Rail infrastructure projects pipeline, 2016
Additional funding for rail infrastructure announced in 2016 autumn statement
High Speed Two (HS2) and proposed major schemes
Network Rail renewal expenditure in CP5
Figure 83: Forecast rail renewal expenditure for CP5
Enhancements expenditure in CP5
Figure 84: Cost of enhancement projects during CP5
Crossrail
Thameslink Programme
Electrification schemes
Other committed schemes
Other named schemes
HLOS capacity metric schemes
Borders
Other Scottish projects
Rolling stock
Long term passenger rolling stock strategy
Figure 85: Fleet size requirements for passenger fleet under a low growth forecast, 2019-45
Figure 86: Fleet size requirements for passenger fleet under a medium growth forecast, 2019-45
Figure 87: Fleet size requirements for passenger fleet under a high growth forecast, 2019-45
Figure 88: Role of electric rolling stock under the medium growth forecast, 2016-45

FURTHER SOURCES & CONTACTS
Institution of Railway Signal Engineers
Light Rail Transit Association
Office of Rail Regulation
Rail Delivery Group (formerly ATOC)
Railway Industry Association
Trade magazines
European Railway Review
International Railway Journal
IRSE News
Modern Railways
Rail
The Rail Engineer
Railnews
Rail Professional
RailStaff
Rail Technology Magazine
Railway Gazette International
Railway Strategies
Trade exhibitions
Traffex 2017
Railtex 2017

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