ERTMS drives change in the signalling market
SCI Verkehr GmbH
INTRODUCTION of the European Train Control System and other new technologies is unlikely to bring radical changes to the signalling and train control sector over the next five years, but will start to open up the market to new suppliers, overcoming the natural boundaries caused by the legacy of national signalling systems.
SCI Verkehr estimates that investment in the European signalling and train control sector will total €5·7bn between now and 2010. Of this, perhaps 40% is currently open to international competition - if the suppliers are prepared to expand their product range or their area of activity. The market is expected to remain roundly constant in size, but will continue to open up.
Our market study defines seven broad groups of signalling technology: ERTMS/ETCS, operations control, electronic interlockings, urban mass transit switch and control systems, conventional interlockings, level crossing protection, and ATP/ATC. Within each of these areas, we looked at the planned annual activity levels in 18 regions over the next five years, assessing the state of the existing infrastructure, the market potential, accessibility and openness, together with a survey of related planning and construction work. The survey covers high speed and conventional railways, metros and light rail.
Looking at the supply industry, we believe that the established and specialised signalling suppliers will increasingly be challenged by more and more niche players offering innovative products and low overall costs. However, CBTC and other telematics-based systems will make slow progress in the European market, and are not likely to achieve broad recognition within the next five years.
The signalling market is not yet as open to international competition as that for track or electrification systems. Most countries still rely on nationally-developed systems, which do not allow for easy transfer of technology, planning, installation, modernisation or maintenance expertise. Nevertheless, in the future more and more systems will make use of standardised electronic components. In particular, we believe that the efforts to introduce ERTMS will start to show results before 2010.
Whilst the overall market potential in Europe will stay roundly constant between now and 2010, we anticipate that the accessible part will grow by 7%. At present the Eastern European market is worth only 10% of that for Western Europe, but it will become significantly more open by 2010. Projects already announced for completion after 2010 show that in Eastern Europe growth will continue in the longer term.
The largest individual markets are Germany (€1·57bn), Italy (€1·17bn), and Spain & Portugal (€525m); these are also the most accessible markets to outside suppliers (Fig 1). The most dynamic region in Western Europe over the next five years will be Spain &Portugal, where we anticipate that the potential market will more than double. Apart from Northern Europe, all other western markets are stagnating at present. Demand is falling in Greece, where investment is expected to drop by 52% following the end of the Olympic-inspired boom. Signalling expenditure in Italy is expected to fall by 46% after the current batch of high speed lines are completed in 2009.
In contrast, Romania and Bulgaria (€102m), the Czech Republic and Slovakia (€100m), Poland (€83m) and Turkey (€80m) offer the best business opportunities in Eastern Europe. The small market in Slovenia will quadruple over the next five years, and those in Poland and Turkey are likely to grow by 150%. In general terms, much of this market potential in Eastern Europe will depend on large projects and their related funding agreements.
Products and services
Perhaps the most important trend in the train control market at present is the change of technology. Between now and 2010, the strongest growth will be led by ERTMS/ETCS and electronic interlockings, which will gradually replace conventional signalling systems (Fig 2).
Electronic interlockings form the biggest single market segment by product, with a projected spend of €1·18bn over the next five years, of which we estimate €576m will be open to competitive bidding. The electronic interlocking market is set to grow by 19% from current levels of spending, whilst the market potential for conventional interlockings will fall by 19% from today's figure of €910m over the same period.
Not surprisingly, ERTMS/ETCS is the area with the largest potential market growth, estimated at 28%. Nevertheless, we believe the railways will continue to invest heavily in conventional ATP and ATC, where a total of €621m makes this the third biggest product category. Level crossing protection is the second most competitive sector, with €254m out of a €474m total spend open to competition.
- European Control Command & Signalling 2005-06 was published by SCI Verkehr in July.