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Integral production grinds to a halt

01 Jul 1999

WHEN Czech Railways ordered a fleet of 10 Class 680 tilting trains for high speed services in August 1995 from a consortium of CKD, MSV Studénka, Fiat and Siemens, the intention was to have the first Integral unit ready for trials in late 1997. Nearly two years later, there is no sign of it, and the prospect of faster inter-city services from Praha to Berlin and Wien is rapidly receding.

Strictly speaking, there is something to see. Sitting in jigs at the CKD Dopravni Systemy works in Zlicin in the southern suburbs of Praha are the roof and floor of the first car. The bodysides are propped up nearby awaiting assembly. But nothing is happening, for CKD has halted production pending resolution of serious differences between the consortium and CD. The contract envisaged that CKD DS and MSV Studénka would assemble the bodies, Fiat would furnish bogies and tilt gear, and Siemens would supply three-voltage traction equipment and controls. Now the whole deal appears to be at stake.

According to Project Manager for the Integral at CKD DS, Ing Milan Haloun, the problems date back to the origins of the deal. When CD issued the tender, it 'had no concrete idea of the final technical solutions'. The train's kinematic envelope had to fit the loading gauge requirements of all three railways (CD, German Railway and Austrian Federal Railways), and the trains also had to meet the regulations stipulated by the UIC for tilting trains. No less tricky was the question of installing and interfacing the signalling, safety and communications systems - each train needed five different signalling and train control systems such as Indusi and LZB for running in Germany.

As the consortium came to grips with the detailed requirements of building such complex trains for cross-border service, it became clear that production was going to be a much greater challenge than originally envisaged, both in terms of cost and expertise. With three countries involved, it was the Central European equivalent of building the cross-Channel Eurostar fleet, with the added complication of tilting.

In view of this, discussions began with CD to renegotiate the contract. The suppliers explained it would not be possible to meet the delivery schedule and to keep to the original price. Meanwhile, the difficulties had been compounded by MSV Studénka being bought by CKD Holding. This led to a decision to build all 70 bodyshells at Zlicin on a single set of jigs and then fit them out at Studénka.

The discussions between CD and CKD quickly became mired in differences of opinion, and have never been properly concluded. At issue was the price for the trains and the delivery schedule. Late last year the order was cut from 10 sets to seven (RG 11.98 p760), with the price per set rising from KC430m to KC605m. In return for accepting this, CD wanted the supplier to take the financial risk. This proved to be a major sticking point, and earlier this year CKD's management decided to halt work.

Haloun's view was that 'we have invested a lot of money, and all the design work is finished, apart from the final technical details with sub-suppliers. Preparations have been made for bodyshell manufacture, with welding equipment installed and jigs ready for all subassemblies; even some electrical components have been manufactured, and Siemens has stored some equipment in Germany.'

CKD has recently sent CD a revised proposal, but the signs suggest an impasse. CD says it has met all its contractual obligations, including paying 15% in advance to the contractors. General Manager Dalibor Zeleny pointed out that CD took out a credit agreement which was not guaranteed by the state, and that this had cost it KC150m so far. 'Any normal customer would terminate the contract and ask for reimbursement.' He said in April that CD was being asked to accept a four-year delay and a higher price, neither of which was acceptable. 'It is up to the consortium to settle it - that's normal business.'

While Zeleny accepted that the suppliers were wrestling with technical difficulties, he pointed out that 'no-one forced them to sign'. Meanwhile, 'it is easier for us to buy conventional rolling stock.'

There exists some hope that the government may broker a compromise, but the difficulties are overshadowed by the whole future of CKD DS. With financial armageddon hanging over the company, Commercial Director Ing Petr Prochazka said in April that CKD DS was seeking a 'strategic partner'. Alstom and Siemens are both candidates.

A cabinet meeting on May 31 heard calls for state funds to help keep CKD afloat, and this led to a decision for the government to take a 52·3% share in CKD DS through the Konsolidacni bank. The rest will remain in the hands of Inpro AS, which bought CKD Holding five years ago.

Meanwhile, Vagónka Studénka has attracted the interest of Thrall Car, and negotiations were under way last month. The deal would see Studénka cease production of passenger stock, switching entirely to freight wagons with a target output of 2000 vehicles in 2000.

CAPTION: Stillborn? Design study for CD's Integral high speed tilting trains

CAPTION: Low-floor trams and 22 five-car aluminium-bodied sets for the Praha metro await completion in the Zlícín works of CKD Dopravni Systemy