Ansaldo STS & AnsaldoBreda: On the growth track

Source: Finmeccanica Magazine Transportation no.3

Ansaldo STS and AnsaldoBreda are poised to play a lead role in the future transport.

The industry will without doubt grow until 2015-2016, and with a reasonable degree of certainty continue to post growth until at least 2020. This is despite the economic slump that began in 2008 and, particularly in Europe and North America, is expected to continue making its effects felt for some time. 

According to the Association of European Rail Industry (UNIFE),even over the last three years the industry has outpaced global economic growth, driven above all by an incredible boom in China, without doubt the world's most vibrant market. 

As a result, growth is expected to be between 2% and 2.5% per year until 2015-16. Above-average growth on emerging markets will offset the slowdown on traditional markets, particularly in Europe. The overall market - infrastructure, signalling and control systems, and rolling stock on urban, conventional, high and very high-speed rail systems – is estimated to be worth €136 billion (calculated for the three-year period 2007-2009). Interestingly, this figure was up significantly on the preceding two-year period, when the market was valued at €122 billion. The market is going through an epoch-making upheaval. Growth in the Asia/Pacific region has been so rapid that these markets have overtaken Western Europe, which was traditionally the number one market on the planet. 

It is calculated that 70% of this market is accessible (the accessible market is defined as the market that is not exclusively served by local companies). The Asia Pacific market is rapidly becoming an open market like Europe, although in China and India a number of segments remain poorly accessible. 

Major economic and social change is sweeping through the south of the world, unleashing enormous demand for new traditional and high-speed rail infrastructure. A survey of major conurbations not yet equipped with a rail system reveals the potential for more than 300 mass transit systems, the majority of which will be built in Asia and the Pacific region, plus Africa and the Middle East. China is set to lead the way, particularly in infrastructure, as it seeks to have as many as 20 thousand kilometres of new high-speed line up and running by 2020. For 2009 alone, the Chinese government set aside around €60 billion for rail system investment, giving some idea of just how much money is involved. As well as leading the market for high speed rail, China is also set to become the world's number one TPL nation. China is experiencing one of the largest mass population migrations in history: by 2025 , the country's urban population will stand at around one billion people, 70% of the total, compared with just 570 million (45%) in 2005. 

In January 2010, 123 cities counted over 1 million inhabitants. Forty-seven of these cities were home to more than 2.5 million people. Shanghai lies at the centre of a conurbation where 264 million people live. With 60 cities set to exceed 2.5 million residents each by 2025, it is dear that China is set to become the world TPL leader. In August 2009, the State Council adopted a plan to build new subway systems in 22 cities, covering a total of 2500 km and requiring an investment of around €1000 billion. In January 2010, Chinese operators managed 1,038.7 km of network, second only to the United States. It is considered likely that over the next 5 years at least another 500 km of new lines will be added. 

Alongside the infrastructure market, another two market sectors are set to grow much faster than the average: control and traffic management systems, and services. 

This is a segment in which Ansaldo STS is a world leader, among other things, boasting the most complete and up-to-date expertise on the second-level European Rail Traffic Management System (ERTMS). Indeed, Italy's Rome to Naples high-speed line was the first in Europe to go into commercial service that complied with second-level ERTMS. Growth in this sector is also set to benefit from the US plan to extend Positive Train Control (PTC) network-wide by 2015, as part of an €8 billion investment plan. 

Development of new networks will also boost the rolling stock market. Here again, the lion's share is set to come from emerging nations, led by India and China. In Western Europe, provisioning will focus for the most part on replacing and upgrading existing fleets. 

This is a sector in which AnsaldoBreda plays a key role, not just on the high-speed train market (for example, the V250 connecting Belgium and Holland, or the very recent Trenitalia order for So high-speed trains), but on the urban and mass service vehicle market, for which it has received orders from the United States, Asia and Mediterranean nations.