One of the major results of the United Nations Climate Change Conference 2015 in Paris was the agreement on stronger CO2 reduction targets. The transportation sector, including public transportation, will be a major contributor to reach these targets aside of already electrified train systems. But the sector faces significant challenges on the profitable innovation of green traction technologies as substitutes for fossil fuels.
Automation will be another innovation driver, especially in the railway transportation sector, to reduce operating cost as well as to provide demand-driven, convenient public transport services. It is also key to improve the popularity of public transit, thus supporting the trend of using integrated mobility solutions instead of owing private means of transport and accelerating the switch away from fossil-fuel based transport.
The public transportation industry was dominated decades ago by public entities. Market liberalization, privatization, and the continuous withdrawal of governments from transportation infrastructure provision are now major market forces. However, in this market environment, public interests still dominate routings and fare box settings and therefore, macro-economic public and business-driven private interests need to be calibrated in order to strike an economic balance.
We advise public and private clients, e.g. transportation regulators, transportation operators and maintainers, transportation concessionaires, OEM’s for transportation equipment and financing entities. Several governments, especially ministries of transportation, are among our clients.
Our expertise in transportation technology fields is broad. We have consulted in various areas:
- High Speed, Mainline and Commuter Railways
- Metro Systems, conventional and driver-less
- Light Rail Systems
- Automated People Movers
- Cargo Railway Lines and Cargo/Logistics Feeder Systems
- Bus Rapid Transit Solutions
- Urban and Interurban Traffic Solutions
- Airport Baggage Handling Systems
The market trends and environment are challenging for all stakeholders. Investment needs grow fast, the fare box revenue grows slowly, O&M revenue streams stagnate, and opportunities for public financing tend to decline. With our partner Infratrans Consultancy Ltd., we offer solutions to owners, operators and suppliers, e.g. how to implement best suited contractual, technical, and financial setups for transportation projects, how to use economic effects of transit-oriented development concepts for project financing, or how to structure regulatory frameworks for new technologies in new markets. We support contractors and OEM’s, e.g. to find the right strategy for positioning themselves in global markets, how to participate profitably in suitable projects and to help them to identify the best partners for particular projects.
The market liberalization and the withdrawal of the public sector from transportation provision continuously open new opportunities for private organizations. We support established and new transportation organizations to optimize their structures to fit best to technical and financial market conditions.
In addition, many new markets evolved in regions where no modern transportation offerings were present in the past, e.g. Middle East, South America or Southeast Asia. In these regions, we also advise governments how to organize regulatory bodies or O&M companies as well as contractors and OEM’s how to best structure local organizations.
Technology and Innovation
There are different sources of innovation. New transportation solutions for new markets. New and more intelligent tools for efficiently managing road traffic and disseminating real-time traffic information to road users. Demand for CO2-reduced or driver-less transportation vehicles and systems. Need for growing security requirements in transportation and the urban fabric. We advise contractors and OEM’s in managing and introducing new technologies and innovations in their global markets as well as concessionaires and owners how to successfully tender them.
Sales and Pricing
Accurate pricing and costing are key success factor in the transportation industry: Limited project funding but growing overall requirements call for best price solution. We support concessionaires and owners in pricing and costing decisions and value engineering efforts concerning their desired transportation project as well as OEM’s and contractors to develop a winning price and cost strategy for the respective project. With our partner Infratrans Consultancy Ltd., we also consult our clients in fare box and non-fare box revenue generation and infrastructure pricing.
Contract Product Negotiation
Depending on the respective project, various contractual product tender regimes are possible: single lot, turnkey, super turnkey and PPP. The core challenge is not to negotiate a one sided risk regime. E.g., functional turnkey tenders transferring the full contract product delivery risk are often showing unwanted results: delays, cost overruns and quality deficiencies. We advise owners and concessionaires as well as OEM’s and contractors, how to best negotiate the most appropriate risk sharing mechanisms for the contracted product and how to monitor it.
Contract Product Delivery
The degree of complexity in projects of all categories is only increasing, in consequence requiring a higher qualification level of the owner’s project management team and involved line organizations as well as more sophisticated tools and methods. This in conjunction with growing scarcity of suitable technical and managerial personnel results in late, over budget, unfit delivery of contract products or even total failure. We support in such situations with measures ranging from assessment and advice over coaching to interim management for our buyer and seller clients.
Increased pressure to outsource, to optimize technical organizations, or increasing shortage of technical personnel has led over the years to a loss of in house abilities and capabilities on one hand and to a new, changed job profile for the remaining technical personnel. Successful working with third parties in an engineering effort, possibly spread over continents and time zones, requires leadership and managerial expertise to a degree that needs prior training and years of practice. We advise and perform successful engineering outsourcing concepts for owners and concessionaires as well as contractors and OEM’s through indirect or direct involvement: from setting up organizations, tools and procedures to providing engineering management key personnel, especially in system engineering.
Without a doubt, also the business in the transportation industry has become more litigious over the years, for various reasons. Should the situation arise that all other efforts to resolve a dispute have failed for whatever reason, the contractually foreseen mechanisms for dispute resolution are set into motion as the last resort. While this appears to be a very legal undertaking—and thus to be performed by lawyers—it is typically a multi-discipline, complex project in itself that is as much ‘technical’ as it is ‘legal.’ Our seasoned professionals are, e.g., active in setting dispute resolution strategies, elaborating claim and counterclaim documents, processing records of events or are acting as technical experts in proceedings for owners and operators as well as contractors and OEMs.