Informed Sources e-preview by Roger Ford (view all archives)

INFORMED SOURCES August 2011

Derbygate – Bombardier outgunned financially

<intro>As Deep Throat said in the film ‘All the President’s men’ ‘Just follow the money’<outro>

Speaking at the Modern Railways Railway Innovation Awards on 24 June, our guest of honour Transport Minister Theresa Villiers could not avoid the grumbling distant thunder over the award of the Thameslink contract to Siemens.  In her speech she followed the line established by her boss Transport Secretary Philip Hammond the day before. 

Describing it as a ‘difficult choice’, Mrs Villiers said that she ‘understood the disappointment in Derby’ but emphasised that the present government ‘did not start the procurement or set the criteria’.  The successful Siemens bid represented the best value for money ‘under the criteria set by the previous administration’.  She continued, ‘we believe in open procurement but also in a level playing field’, adding ‘we want to see other railways follow suit’.

Philip Hammond had introduced the ‘level playing field’ metaphor in the European context,  when he said in Parliament ‘It seems astonishing that, complying with the directive as we do, they [Britain’s “neighbours and competitors” ] have managed to achieve very high percentage penetrations of French built trains on the French railways and of German built trains on the German railway.’

Furore

A subsequent joint letter from him and Business Secretary Vince Cable to the Prime Minister, inspired by the Thameslink furore, urged that the next phase of the Government’s current review of large scale public procurement should examine what more can be done to improve the business environment for companies competing for Government contracts.  While conceding that the government is constrained by EU procurement regulations, the letter said ‘[But] there is an issue as to whether in our own procurement compliance the right balance of risk has been achieved.

Then on 5 July Bombardier announced that it was starting a 90 day consultation process to ‘downsize and adjust capacity’ at its Derby Litchurch Lane Works.  This would involve the loss of 446 permanent jobs and 983 contract staff would also be affected.

For the rest of the week we had an old fashioned political ding-dong, with Philip Hammond claiming that all he had done was open the envelope to see what we had inherited from a procurement where the previous Labour Administration has written the specification and set the success criteria.  Shadow Business Secretary John Denham, riposted that the Coalition was now in charge and what was it doing to do to save Britain’s last remaining train factory?

I won’t bother going any further into the subsequent political argy bargy – on going as this column went to press, except to expose a nasty weasel.  Part of Mr Hammond’s defence was that in May Bombardier had written to DfT saying that even with the Thameslink contract around 1200 lay-offs would have been ‘inevitable’.

In fact, what was intended as a private letter actually said was that while jobs would go, even if the company won the Thameslink contract, there would be no redundancies among the permanent staff, which is where the heavy duty value is added.

Money

Why is all the political ’tis, ‘tisn’t irrelevant? Because, in reality the contract was not really a competition in train building but a trial of financial strength. 

As with the Intercity Express Programme, DfT is buying a long-term total train service provision package for Thameslink. In such Private Finance Initiative (PFI) deals, the winning consortium raises the funding to buy the trains, build or modernise the depots and then maintains the trains for the life of the contract. It guarantees to provide a specified number of daily diagrams and this is what the Government pays for.

So the cost per diagram has to include not only maintenance, and overhauls, but also the return on the capital invested in trains and depots.  This also determines the composition of the bidding consortia for such deals.

In the case of Thameslink, the structure of the winning bid team was interesting.  It was made up of Siemens plc plus Cross London Trains, a separate consortium of Siemens Project Ventures GmbH, Innisfree Ltd and 3i Infrastructure plc.  Innisfree has been in the news recently as the value for money of Private Finance Initiative schemes has come under question.

Bombardier’s Velo City consortium comprised Bombardier Transportation (Holdings) UK Ltd, RREEF Ltd (Deutsche Bank’s property subsidiary), Serco Holdings Ltd, Amber Infrastructure Group Ltd and SMBC Leasing (UK) Ltd (a Sumito Mitsui Banking Corporation subsidiary). 

Credit

This assembly of financial muscle confirms that the decisive factor in the bidding was not the price of the trains but the cost of the money to fund them.  And I am indebted to my old chum from BR privatisation investigative journalism days Alistair Osborne, now Business Editor of the Daily Telegraph, for showing how this gave Siemens a significant advantage.

All big organisations are given a credit rating by Agencies such as Standard & Poor’s.  The higher the credit rating, the lower the cost of debt, and PFI deals are all about long term debt.

As Alistair explains, Siemens’ debt is rated at A+ by standard & Poor’s compared with Bombardier at BB+. In this rating system, AAA is the top rating.  For the sake of completeness Hitachi is rated BBB+ and Alstom BBB.  According to S&P anything below BBB is regarded as having ‘significant speculative characteristics’.  In other words it is a more risky prospect which means that investors will expect a higher return

Each step up in the rating reduces the cost of debt by around 25 basis points (0.25%).  So with six steps between the two ratings, the Bombardier consortium would have been was facing at least an extra 1.5% a year on the cost of financing the deal compared with Siemens.  Over a 20-30 year contract that difference compounds up and would be worth several hundred million pounds.  

This makes a nonsense of the level playing field.  Extending the metaphor, the ability to spend tens of millions in the international market for football players means that Manchester United would expect to beat Stevenage Boro irrespective of the inclination of the pitch. 

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In the case of the Bombardier train contract, the procurement process was designed and initiated by the Government of whom she was a member. We are bound by the criteria that they set out, so we have to continue with the decision that has been made according to those criteria. Separately, we are setting out to ask what more we can do under the rules to make sure that we boost manufacturing and not have situations like this in future.

David Cameron MP replying to Margaret Becket MP (Derby South) 6 July 2011

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Loopy

So was Bombardier effectively doomed from the start by DfT’s decision to go for PFI deals for new train fleets?  It certainly hasn’t won any orders since DfT took over procurement.

 Well, not if its management and local MPs had been prepared to fight for the survival of Derby from the start.  If, as the Government now seems to have discovered, Derby is a national industrial asset of strategic importance there are ways of keeping it fed with work.

Consider the ICx contract in Germany (Informed Sources June).  The framework contract was awarded to Siemens, but Deutschland GmbH ensured that the work was spread around by making Bombardier a ‘development partner and supplier’.

In the case of IEP and Thameslink, it would have been a relatively simple matter for the invitation to tender to have specified that, say, final assembly should take place at Derby. Instead we have the absolutely loopy situation where in a speech at Railtex on June 15, the day before the Thameslink preferred bidder announcement, Transport Secretary Philip Hammond extolled the job creation associated with the IEP. 

Naïve

Many chums in the railway industry are mightily impressed with Mr Hammond and hope that he won’t be moved back to the Treasury. But I reckon that Derbygate has exposed both his unsteadiness under fire and a certain naïveté when it comes to the national interest. 

Does he not realise that the UK rail market, (see table 1) is a zero sum game, with manufacture over the next decade dominated by three contracts – Thameslink, IEP and Crossrail?  And Crossrail is Bombardier’s remaining chance to maintain a manufacturing base at Derby for main line rolling stock?

But has the Crossrail procurement team any interest in maintaining train building in Britain?  Of course not.  Nor would I expect its old-railway managers and engineers to break the habit of decades.

Threat

And this is where we return to Mr Hammond’s eulogy of Hitachi’s proposed assembly plant at Newton Aycliffe in Country Durham.  As Hitachi Managing Director Alistair Dormer explained to me, the new plant will have more capacity than would be needed to meet the IEP requirement.

Hitachi see the plant as its base for supplying the wider European market, as well as winning further business in the UK.  And in the UK the company has already pre-qualified for Thameslink.

So, a potential 500 assembly jobs in the North East plays 1500 actual manufacturing jobs in the Midlands, including high value engineering, design and procurement posts.  And, of course, I shouldn’t need to add that when it comes to playing fields European teams are not welcomed even into the changing rooms in the Japanese railway market (I think that metaphor has been done to death: Ed)

And yet, interestingly, none of the politicians getting exercised over the Thameslink decision seem willing to discuss the real threat to Derby jobs.  And compare Bombardier’s studious silence during the Foster review of the IEP with Hitachi’s diligent lobbying, centred on job creation at its new plant.

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There is a perception that other EU countries appear to manage their public procurement processes with a sharper focus on domestic supply than we have hitherto,"

Letter from Philip Hammond and Vince Cable

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No fan

Bombardier’s delivery has been poor and they source parts from Europe’

Keith Ludeman

Chief Executive Go-Ahead

Quoted in the Evening Standard

June 22 2011

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Derby production run-down

Completed during 2011

Class 379 EMU. 120 vehicles for National Express East Anglia

Class 172 DMU. 69 vehicles for London Midland

S-Stock. 58 eight car trains for London Underground Metropolitan Line

Deliveries 2012-2015

From 2012

S-Stock 53 seven car trains for

London Underground Circle

and Hammersmith & City lines

From 2013

S-Stock 80 seven car trains for London Underground District line

All S-Stock trains operational from 2015

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Future

Meanwhile, where does the loss of Thameslink leave future production at Derby?  London Underground’s S-Stock fleet, totalling nearly 1400 vehicles, was described as the UK’s largest rolling stock order when it was awarded to Bombardier under the PPP.

But the first eight car trains for the Metropolitan Line are now in service.  And delivery is due to be completed by the end of this year. 

Each production line at Derby turns out one vehicle each working day.  With production of the 53 seven car trains for the Circle and Hammersmith & City lines due to start early in 2012, one line could complete this fleet by mid 2013.  A second line running in parallel, and starting in 2013 could complete the District line fleet by the end of 2014.

With lean production management this output would require low-hundreds of workers, a figure of 300 has been quoted.  But what really matters is the engineering, design and procurement departments at Derby for which the Thameslink order would have represented continuity of work.

Currently Bombardier is prequalified for the Crossrail fleet of around 600 vehicles.  Crossrail intends to award the contact in ‘late 2013’ with the first units starting test running towards the end of 2016. If Bombardier were to win this order the first hardware would appear on the production line during 2015.  This would still leave a gap in production after the S-Stock is completed.

Vaunted

But what about the Government’s much vaunted acquisition of 2100 new vehicles by the end of the next Control Period in 2019? Around 1800 of these are represented by Thameslink and the Intercity Express Programme.

In the vertically separated world of railways, Crossrail wasn’t included in the 2100.  But Table 1, from a recent Parliamentary written answer, is more comprehensive.

Of course, coming from the Civil Service’s rest home for the terminally incompetent, it omits the small batch of EMUs for London Midland, where Siemens is the preferred bidder, while including the Manchester-Scotland mini-fleet which as piggy-backed onto the London Midland requirement.  Even this is out of date, since it now 10 four cars for nine diagrams.

Also not shown in the Table, but currently seeking expressions of interest, is the Merseyrail concession which is exploring replacement of its Classes 507 and 508 rolling stock fleets.  These total 177 vehicles.

China syndrome

Interestingly, at the Innovation Awards I had a short chat with a group of engineers from Chinese Manufacturer CSRE, who had just been on an exploratory visit to Liverpool.  (James Tony is sending a photo of me and TV with them).  And this only adds to the pressure on Government to produce a strategy for the rolling stock industry.

In contrast to Japan’s a closed market, last September Invensys Rail, signed an agreement with a CSR subsidiary to sell the Westrace Interlocking in China.  The deal also includes the two companies working together to sell other train control and signalling solutions into the Chinese domestic mass transit market.  And CSR's rolling stock companies and Invensys Rail will jointly bid for a number of major international contracts.

I’m not sure that our political masters, let alone their civil servants have the intellectual flexibility, or should that be subtlety to cope with the multi-dimensional railway equipment market in the age of European procurement.  Meanwhile, Informed sources suggest that the gloves may be coming off in Derby.     

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Table 1

Trains entering service over the next 10 year

	Number of vehicles	Approximate number of diagrams
Thameslink (1)	1,200	106
Intercity Express Programme (1)	600	100
Crossrail (1)l	600	57
West Coast	106	-
National Express East Anglia	120	27
London Midland	69	24
Chiltern	8	3
TPE	36	8
	2,739

(Source: DfT)

ETCS – implementation going backwards

<intro>If ORR has woken up things must be really serious<outro>

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ERTMS was finally commissioned on the Cambrian route in March. The delay and difficulty experienced raises questions about the readiness of the industry to deliver national rollout as planned, at an economic price and delivering the expected benefits. We have therefore asked the independent reporter Halcrow to carry out a review of delivery to date to establish learning points and provide a basis for assessing future roll-out plans

Office of Rail Regulation

Network Rail Monitor Quarter 4 2010-11

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What happens next, now that the Early Deployment Scheme (EDS) for the European Train control system (ETCS) has been commissioned on the Cambrian route, was the lead topic in the May 2011 Informed Sources. Now, here we are three months on and matters are going backwards and the Office of Rail Regulation (ORR) has launched a review.

If the ORR suddenly decides to investigate something which has been rumbling away for months or even years, then it is a sure sign that things are even more dire than this column imagined.  So, following the ORR announcement, it came as no surprise to learn that Network Rail has inserted a ‘capability review’ of potential suppliers into its ETCS procurement programme. 

Just to recap, pre-qualified  suppliers had been expecting to receive an Invitation to Tender (ITT) for new framework Contracts based on taking  ETCS implementation from GRIP Stage 5(detailed design) to GRIP Stage 8 (project close-out).  But they have now been told by Network Rail that procurement is effectively re-starting.

First they will be taking part in a three month ‘capability review’.  Only then will a revised ITT be issued.  And this will come in two parts.

Bids are now expected to be called on the basis of taking schemes to GRIP Stage 3 (Option Selection). But potential bidders would also be asked to provide, separately, implementation costs for continuing from GRIP Stages 4 (Single Option Development) to GRIP Stage 8. 

Manana

This suggests that not much is going to happen on the ETCS order front anytime soon.  And Network Rail is in no hurry because it has already made its two major resignalling projects independent of ETCS. 

In both cases, the Thameslink central core through London and the Great Western Main Line modernisation, it is assumed that new conventional multiple aspect signalling will be installed.  ETCS would then be installed later as an overlay. 

How much later? As reported in the May Column, on the GWML the ETCS overlay was expected to follow commissioning of the conventional signalling by around 18 months.  That now seems optimistic.

While  these likely further delays to ETCS implementation will not affect the operational railway, they mean that Network Rail may have to consider whether to persevere with ETCS System Requirement Specification (SRS) Version 2.3.0d or wait for the more capable Baseline 3 Version 3.0.0 software which is due to be signed off in 2012

Euro-blues

That ETCS generally is still in a mess was confirmed by the European Commission injecting another Euros100 million into its pet project.  The money is coming from the Trans-European Transport Network (TEN-T) programme. 

However, this latest call for proposals for ETCS linked projects did not feature in the original plans for the 2007-2013 budget period.  Which hints at desperation.

 According to the TEN-T Executive Agency, this third call demonstrates its ‘strong commitment to support ERTMS and promotes a test-oriented approach to ERTMS by incorporating testing activities into most priority areas.’ The aim is ‘to move closer to a situation whereby on board RTMS equipment is tested solely against test specifications and not line by line’.

My cynical interpretation is that the extra funding has had to be rustled up provided in an attempt to overcome the problem identified in the May Column - the fact that ETCS is still not fully interoperable.  This was confirmed when the announcement of the call said that the aim to create the ‘necessary assurances’ that each piece of on board equipment does not need to be tested against each and every line. It will also be ‘useful’ to complement the existing test specifications ‘with specific operational scenarios addressing complex situations’.

And even the TEN-T Executive Agency concedes that currently ‘there is no real means today to verify that a line is compliant with the specification’.  Even on new lines, which have tended to have trackside and on-board equipment from a single manufacturers, ‘it may make sense to carry out tests with different on board units’.

Five Priority Areas have been identified for projects to be eligible for the extra funding.  Given that SRS V 3.0.0 is supposed to be on its way, the fact that the first priority area is testing to demonstrate interoperability between 2.3.0d lines and on board equipment from different suppliers, speaks volumes.

Still, we shouldn’t mock.  Network Rail’s Hertford North Integration Facility (HNIF) would seem to be a prime candidate for some of these Euro millions, particularly since costs incurred since the start of 20911 can be included.

And even the EDS could be eligible for support under the Second Priority Area.  This will fund projects contributing to upgrades of existing lines and trains to SRS Version 2.3.0d.  Which is just what is happening.

Meanwhile, in a written answer on June 28, Transport Minister Theresa Villiers confirmed that a formal application has been made to the European Commission for derogation in respect of signalling for the Central Operating Section of the Crossrail project (Informed Sources June 2011).  This will free Crossrail from the requirement to equip new lines with ETCS and is currently being considered by the commission.

IEP – Theresa’s amazing numbers don’t add up.

<intro>When it comes to Parliamentary written answers it’s definitely a case of GIGO<outro>

Since the Government announced that procurement of the Intercity Express Programme was to resume, the sharper back-bench knives in the Parliamentary box have been seeking detailed information on just what the Department for Transport thinks it is buying.  One such inquisitor is Andrew Gwynne, the Labour MP for Denton and Reddish.

He had asked for DfT’s estimate of the average costs of procurement of hybrid and electric IEP trains. And in a written answer on 14 June Transport Minister Theresa Villiers replied as follows.

In the recent appraisal of the Intercity Express Programme, ‘the average capital rental costs of a bi-mode set were assumed to be around £180,000 per month and the average capital rental costs of an electric set were assumed to be around £170,000 per month’. These costs were based on five-car short sets, and are given at 2009-10 prices.

Now the rule of thumb among my chums in red braces in the leasing industry is that the cost of borrowing is £9,000 per £million per month.  So if you know the monthly capital rental, you simply divide by 9000 to get the assumed capital cost.

And in the case of IEP, the quoted ‘capital rental costs’ equate to capital costs per vehicle of £4 million each for the bi-mode and £3.8 million for the straight EMU.  Now this has to be bonkers, because Informed Sources confirm that the actual bids from the two consortia were in the range £2.6-2.9 million per vehicle.  And a new Pendolino is only £2.5 million per vehicle. 

Incredible

When I was doing my own comparisons of IEP and the EMU/diesel locomotive – in pursuit of the incredible £200 million difference in Net Present Value also claimed by Theresa (Informed Sources May 2011) I  tried to avoid pessimism bias by assuming that an IEP electric cost £2.25 million plus an extra £250,000 for each diesel raft under the bi-mode.  And even then the £200 million better NPV didn’t seem likely.

But now it seems I was hopelessly optimistic. So let’s compare the £180,000 per month for a five car bi-mode with the train it is supposed to replace, a re-engineered IC125-10 with eight trailer cars.

This has a capital rental of under £50,000 per month.  Less than a third of the shorter Bi-mode.  And this rental includes amortisation of the substantial investment in re-engineering and life extension.

Rich seam

And the indefatigable Mr Gwynne continues to mine this rich seam of nonsense.  And unlike many MPs he knows how to play the game.

Here are his next questions.

(1) what estimate has been made of the average cost of operating (a) hybrid and (b) electric trains over electrified tracks;

(2) what estimate has made of the average cost of operation and maintenance of (a) a hybrid and (b) an electric train.

And on June 20 Theresa Villiers replied, the written answer containing Table 1.  According to DfT, these are figures which were used in the re-appraisal of IEP following the publication of the Foster Report on the Value for Money of IEP and credible alternatives.  They all refer to five car ‘short’ sets

 

£
Cost per mile 2009-10 prices	Maintenance	Fuel	Variable track access charge
Bi-mode
When under diesel power	2.74	1.72	1.13
When under electric power	1.78	1.34
Electric	1.78	1.32	1.03

Let’s go through them in order.

Detailed analysis of maintenance costs is hampered by the fact that all the IEP EMUs have an underfloor mounted auxiliary diesel generator set (AGU) in one vehicle. In my analysis I assumed that a five car EMU would have the maintenance cost of three EMU vehicles plus one DMU vehicle.  As usual, the aim was to be approximately right rather than precisely wrong.

At 35.6p per vehicle mile DfT’s figure for the electric IEP is about 5% lower than current new generation EMUs in service.  Since Hitachi expects to use the AGU nightly to power depot moves, there will be an additional maintenance cost.  So I reckon that the figure in the table may be slightly optimistic – but no matter.

Maintenance costs for the bi-mode are expressed in terms of ‘when under diesel power’.  The proportion of running under diesel power is likely to vary between diagrams and also with engine house.

From the data in the table, I make the maintenance cost per mile of a bi-mode vehicle 60p.  This compares with around 75p/mile for a DMU vehicle with a similarly rated engine.  Given that the DMU engine runs all the time, while the bi-mode will be shut down under the wires, the figure in the table also seems near enough.

Weight penalty

Fuel and energy costs are largely dependent on current prices and I haven’t analysed them in detail.  Readers may care to do so and let me know what they find (roger@alycidon.com).

However, having banged on at some length about the iniquity of Bi-modes hauling dead diesels for miles under the wires it is good to have some indication of the cost.  As you can see, that when the five bi-mode is running in electric mode the 20 tonnes of engines and fuel equates to an additional 2p/mile over the EMU energy cost.

Track cruncher

Now we come to another of Theresa’s eyebrow raiser – the estimated Variable Track Access Charges (Variable TAC).  Actual track wear costs can be calculated for individual vehicles using Network Rail’s VTISM programme, but these are not the same as variable TAC which are set independently, and idiosyncratically, by the Office of Rail Regulation. 

Naturally, this is not a transparent process and haggling clearly takes place.  Some time back, when I needed some Variable TAC data, the numbers for the Class 390 Pendolino were not in the published ‘Price List’

But when I asked for the information, ORR wouldn’t provide it.  Then, when I whacked them with the Freedom of Information Act, the request was again rejected on grounds of commercial confidentiality.  The charges eventually appeared in ORR’s ‘access price list’ for the current Control Period.

Or take the case of the SWT Class 450 Desiro EMUs, now being modified to reduce sky-high track damage, (Informed Sources May 2011). ORR set the Variable TAC for these trains which Network Rail promptly challenged as being unrealistically low.  The challenge was rejected by ORR and now we have a £4 million retrofit programme.

High

DfT’s Variable TAC figures for IEP in the table put the cost per vehicle mile at 20.6p for the EMU and 22.6p for the heavier Bi-mode.  These figures are extremely high.

Let’s start with the Bi-mode. The Siemens Class 185 Desiro DMU, which is a close approximation to the bi-mode IEP in terms of weight and power, has a Variable TAC of 12.53p per vehicle mile.  The most expensive vehicle in terms of Variable TAC is the Class 390 Pendolino motored car at 14.06p per vehicle mile.

A comparison for the IEP EMU would be the Siemens Class 444 Desiro.  The powered cars have a Variable TAC of 11.07p per vehicle mile.

Putting these official figures into my earlier analysis I reckon that the Variable TAC for the 100 units in the proposed IEP order would be around £10 million a year more than for a fleet of 100 EMUs with diesel locomotive haulage beyond the wires.

Incredible

If these official figures for operational costs and capital rentals are correct, then   the DfT claim that IEP had a £200m NPV advantage over the credible alternatives examined has seems unlikely.  But, it doesn’t stop there.  In a presentation to the National Rail conference in June, my old chum Alistair Dormer, showed a slide which  compared track damage per seat mile for a 2+8 IC125 with both  Bi-mode and electric nine car  Super Express Trains.

This nine car is a new addition to the SET stud and provides 602 seats. The bi-mode would have five AGU.  Weights are not available until the interior arrangements have been specified.  The weights in Table 2 are derived from quoted data.

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Table 2

Train	weight	cost/seat mile	Seats	cost/train mile	VTAC/train mile	Weight/seat
IC125 2+8	410	0.4	560	2.24	1.09	0.73
SET 9 car bi-mode	439	0.25	620	1.55	2.03	0.71
SET 9 car Electric	406	0.21	620	1.30	1.85	0.65

Source: Hitachi with additional analysis by Informed Sources

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Table 2 brings together the figures for track wear costs in Alistair’s presentation, Theresa’s figures for Variable TAC plus the Variable TAC for a 2+8 IC 125 from the ORR price list.

And I’ll leave you with three questions.

Do you really believe that the Variable TAC for a 2+8 IC125 will be roughly half those of a nine car EMU of approximately the same weight? 

Do you really believe that a softly suspended smooth riding IC125 will generate 86% more track wear than a nine car EMU – even allowing for two 70 tonne Bo-Bo power cars?

Are you surprised that I no longer believe anything coming out of DfT, especially when it relates to IEP?

Captain Deltic’s Diesel Diversions

<intro>Electrification may be where it’s at, but diesel traction starred at Railtex<outro>

Received wisdom is that diesel traction, at least in passenger service, will be a wasting asset in the 21^st Century.  My colleague Mr Walmsley assures me that the Rolling Stock Companies will not be buying any more Diesel Multiple Units.  At lunch recently a ROSCO Managing Director was less certain, suggesting that when the extent of future electrification becomes clear you might be able to make a business case – but for the present DMUs are off.

Now this could be an example of that long standing civil service delaying ploy, ‘the unripeness of time’. As in, ‘of course we will need to buy more DMUs when the time is ripe, but now is not that time’.

And it is the case that the Great Western Main Line electrification will, one day, release the Networker Turbos (Classes 156/166).  The Northern Triangle electrification, will also allow other DMU fleets to be cascaded.

So, if you bought, say, 25 two car Class 172s, with all the Euro 3B emissions gubbins, come 2020 you could find that the thick end of £200 million of new trains were sitting in expensive warm store not earning a penny because DMUs cascaded by electrification schemes were  just as capable and a lot cheaper. Don’t forget, either, that the extra subsidy to lease your expensive new trains needs to be written into Franchise Agreements by the Department for Transport.  Would you, as a ROSCO, risk putting that sort of money into DfT’s antipathetic hands?  No, I thought not.

Even diesel locomotives are not immune to such blight.  The reason why ROSCOs and finance houses will fund a cheapish but quite nasty locomotive like the Class 66 is that if it runs out of work in the UK, you can transfer it to mainland Europe where a go-anywhere locomotive can usually earn a living.

But the Class 66, while entirely adequate for a wide range of jobs, and is reliable and cheap to maintain, is neither an uber-heavy hauler – like the Class 60 or the Powerhaul - nor a simple trip locomotive, for example a Class 20, 31 or 37.  And no one is going to build a new replacement for the niche market served by these 1960s veterans.

Steroids

Which brings me to the first stand on my totally unexpected diesel odyssey at the Railtex exhibition in June.

English Electric’s Class 73 Electro-diesel – another design from the master John Dowling’s 3H pencil – was conceived to keep the Southern Region running when the third rail was not energised during track maintenance, or beyond the limits of the Southern electric network.  Drawing current from the third rail this little Bo-Bo has a nominal traction rating of 1500hp.  But it also carries a four cylinder English Electric 4SRKT diesel engine which keeps it moving with the current off.

While the Class 73 can deliver is rated starting tractive effort under diesel power, with only 600hp it is not long before the constant power curve is reached.  Then performance falls away rapidly as speed increases compared with performance on the third rail.

And while the SRKT is easy to maintain and so lightly stressed that it would last forever, it is not exactly environmentally friendly.  And when it is hard against the collar, which it will be much of the time, it tends to overheat.

But against all this, the Class 73 offers a unique capability, which no one can afford to replace with a new loco.  At which point, enter Rail Vehicle Engineering Ltd (REVEL) and their American Partners the National Railway Equipment Co (NRE.

Super 73

On their Railtex stand they were displaying a diesel locomotive repowering concept which is both ingenious and simple.  NRE make self contained diesel generator sets, the sort of thing you see humming away on construction sites. The business they have developed in the US market is taking the engines out of old diesel locomotives and replacing them with multiple diesel generator sets to provide a similar power rating.  They already have approaching 300 sets powering locomotives in their home market.

Since the Class 73 in diesel mode is underpowered compared with the capacity of the electric traction equipment, RVEL are planning to replace the 4SRKT with two NRE generator sets, each powered by a 750hp Cummins QSK 19 engine.  The QSK 19 has been, of course, the engine of choice for the 125mile/h DMUs and being a general purpose engine has good product support and long term spares availability.

Transform

This transplant will transform the Class 73, giving it a similar tractive effort curve under both third rail and diesel power. Even better, if the job can be done with 750p, NRE’s microprocessor based control module will automatically shut one gen-set down.

In fact the control system is much cleverer than that.  For example, direct current traction motors can be vulnerable to moisture. So on start up, with the engines at idle, the control electronics can put current through the motors to warm them up.  And the IGBT chopper also controls the power when on the third rail.

While the US conversions represent at useful shop window, I was encouraged to hear that, in line with the Class 73’s EE heritage, RVEL is going to build a demonstrator.  Several companies are showing interest in the Super 73. 

But, while the Class 73 is the ideal platform, these conversions don’t have to stop there.  The Class 31 is an obvious candidate for the gen-set treatment. 

And I am reminded that the Class 37’s African progenitors were rated at 2025hp.  If you could fit three gen-sets in you would have 21^st century low-axle load traction unit with an enhanced tractive effort curve.

Drive train

Next on my sweep up and down the aisles was Voith. Back in the 1980s when BR decided the replacement for the first generation DMUs was not BR Research’s Railbus but a second generation DMU, its engineers needed a proven traction package. And having investigated what their colleagues in Europe were doing returned with the mantra ‘Cummins, Voith Gmeinde’ – engine, transmission and final drive.

Three decades on and Voith is now supplying complete DMU drives trains, including a diesel engine meeting Euro 3b emissions regulations.  They have also produced a chunky high power diesel locomotive – but that’s something for another time.  As is their new all-electric traction package to be fitted to a new fleet of trams for Helsinki.

So why this move to total packages, I asked Heinz Tengler, Senior Vice President of Voith’s Rail Diesel Driveline Group?  Well, in the case of diesel traction it is partly self defence. Voith has more experience of diesel drive trains than most, and their associated problems, either with the engines or caused by the engines. 

Second, for engine manufacturers, rail is a tiny niche market, but one capable of generating unique problems, and high profile problems at that.  Finally, rolling stock manufacturers often like to buy self contained ‘engine rafts’ with engine, transmission and cooler group which they can bolt under their vehicles with one point of contact for all technical issues

Nasty

So ‘If you want to be in our business, you have to understand engines’, Heinz explained.  As an example he instanced a DMU contract in Italy which used an off-the- shelf diesel engine. 

But the power unit could  not live with the rail environment, where engines routinely cycle from idle to full power repeatedly, rarely settling down to constant load.  The contract became nightmare for the engine supplier, with some engines having to be changed five or six times

This, of course, is the age-old story.  Rail really is the nastiest environment, but one which Voith understand.     And the first application of this experience to the new total package philosophy was based on the MAN eight cylinder diesel engine. 

Voith takes the bare engine off the MAN truck and bus production line and tractionises it.  Physical changes include a new sump, but more important are the modifications to the engine’s thermodynamics and the combustion properties to match the specific demands of railway use. Voith has also handled the certification associated with Euro 3b emissions legislation, which the company claims the new engine ‘undercuts’.  

Rated at 500kW (670hp) the Vee-8 is at the upper end of the power range for UK DMUs, and, of course, horizontal engines are more suited to the restricted UK loading gauge and floor heights. So the MAN flat six cylinder engine has been given the same treatment and is being offered at 390kW (520hp). Several potential customers are showing interest.

Real cool

Voith also manufactures the radiator and fan drive assemblies for traction units, collectively known as cooler groups.  Integrating these with the engines they cool is another art, particularly in these days of electronically controlled engines.  All the First Great Western IC125 power cars were fitted with Voith cooler groups as part of their re-engining with MTU diesel.  These are returning to Voith for their first overhaul.

Voith’s in-house ‘vertical integration’ should aid optimisation of the drive package, in the search for greater fuel efficiency and lower emissions.  As Heinz Tengler says ‘because we make the cooler groups we can play tunes on packaging the raft – also aiming for a maintenance friendly solution.

Mechanical.

If new DMUs are off the agenda for the foreseeable future, the corollary is that the existing DMU fleet must be assumed to remain in service indefinitely.  Which, as with the ex-BR EMUs, raises the question of re-powering.

This brings me to the next stop on my grand tour of Olympia, the ZF Friedrichshafen stand.  I first came across ZF in my youth when their gear-boxes were de rigueur for racing and high performance cars. But at Railtex it was their Ecolife Rail powershift transmission that caught my eye.

Voith’s ubiquitous T211 is a hydrodynamic unit, which uses the kinetic energy in the fluid to transmit power through rotating turbine blades.  Such hydrodynamic units have two components, the torque converter and the fluid coupling.  They can be very efficient when working at their optimum speed, but the actual efficiency depends on the duty cycle.

As they had explained on the Voith Stand, in the Class 158 DMU, the T211 spends a lot of time in the converter stage, when maximum efficiency depends on bringing in the fluid coupling.  One way to get round this is to replace the coupling with a multi-speed mechanical gearbox.

With modern electronics shifting up and down the gears under load (power-shifting) is a doddle.  You can also have an integrated retarder, to reduce brake maintenance and costs. 

Economy

ZF claim fuel savings over up to 20% compared with hydrodynamic drives for Ecolife Rail. Which introduces a possible financial justification for repowering DMUs0.  If the re-engineered DMU costs less to run at a time of rising energy prices then you can write these savings into a business case.

This idea is not unique to ZF. On the Voith stand they were showing the DIWA Rail transmission developed for DMU engines with ratings up to 500hp.  This too is a hydro-mechanical transmission with a torque converter coupled to a multi-speed gearbox. 

Potential retro-fit applications identified by Voith include the Class 158 already mentioned, plus the Class 165/166 Networker turbos.  A study a couple of years back showed payback over 6-8 years. 

An important point about  re-power schemes in general is than in addition to the new kit fitting under the vehicle, the pay back period also has to fit into the remaining life of the franchise! And we are told that longer franchises are on the way

Starry eyed

But top of my list of ‘must sees’ at Railtex was at the far side of the hall from the starting point of my tour.  So it was not until 16.30 that I arrived at the MTU stand.  And there it was, the object of my interest – the new 1600 Series engine.

I discovered MTU engines one winter when flu knocked out the sales team at the marine division in the conglomerate for which I was Group Publicity Manager.  With only the Managing Director fit to man the stand at the Genoa boat show, ‘Can we borrow Roger’ came the cry to head office.

With a nod from the Managing Director, I was off like a shot.  How I helped sell a luxury off-shore cruiser to an industrialist and his beautiful film star wife, who I failed to recognise, is a story for another time.

In breaks from manning the stand I looked at the opposition and in the course of these wanderings came across the engine section.  Having swooned over the rococo lines of the Isotta Fraschini I came across the MTU stand and it was a different world – the Vee 8 diesel on show looked as if it had been machined from the solid metal.  I wasn’t to come across an engine to match this sleek aesthetic until I saw the first Paxman VP185 several decades later.

Excrescences

And I have to say, that even with the excrescences imposed by Euro 3b emissions regulations, including  Selective Catalytic Reduction,  the Vee 12 1600 series is typically MTU. It is rated at up to 700kW (940hp) which is what makes it so attractive to Hitachi for the SET Bi-Mode – now that the laws of physics are accepted by DfT.

I really had only one question for Managing Director Mike Ferris who was manning the stand: ‘will this little gem really fit under SET’? And the answer was, that it will indeed fit within the dimensions Hitachi has provided.

This will require flexibility when it comes to packaging the engine raft and it will be a ‘clearance fit’.  Mike emphasised that the restricted access for maintenance should not be an issue because the raft will need to be dropped only every 10,000 hours for fuel injector changes.

So, despite all the forth and bubble about batteries and fuel cells, 121 years after Herbert Akroyd Stuart patented the heavy oil engine what we now call the diesel looks likely to run on in rail traction for decades to come.  And on the UK rail network it looks as though it is a case of the DMU is dead, long live the DMU.

And finally.

Last month’s claim that Rolling Stock Company Porterbrook specified the Bombardier Turbostar for maximum route availability brought a swift correction from my retiring chum Adrian Shooter.  That’s ‘about to retire’ as opposed to ‘shy and…’ obviously.

In 1995, well in advance of the Chiltern franchise being let Adrian and Andy Hamilton wrote the specification for what was to become the Class 168 and put it out to tender.  What was then ABB put in a bid. Remember, back in those days, no one thought the DMU market would amount to much. 

Newly privatised Porterbrook was invited to a meeting to discuss funding for this new rolling stock.  Managing Director Sandy Anderson’s opening gambit as he walked into Adrian’s was, ‘The answer’s “yes”, what’s the question’.

And that’s how the runoff 1064 days without a new train order was broken.

 

 

 

 

 

 

 

 

 

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