NIB Nordic Investment Bank

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Sweden: Renewable wins the train race

X2000 crossing Øresund. Photo: Stefan Nilsson / SJ
Crister Fritzson, President & CEO of SJ AB. Photo: Stefan Nilsson / SJ

More people are choosing to travel with 20-year old high-speed X2000 trains the operator company SJ AB is now set to upgrade. “The environment will benefit every time a customer chooses to travel by train”, says Crister Fritzson, head of Sweden’s largest train carrier.

In order to maintain its position as market leader, SJ is investing SEK 3.5 billion (EUR 370 million) in technological and physical upgrades to 36 high-speed X2000 trains over the next three years. This is the most extensive investment programme SJ has ever implemented. NIB is contributing a long-term loan of SEK 770 million (EUR 81 million) to finance project.

“We are facing strong competition in the long-distance passenger traffic segment. A modernised X2000 is a very strong competitive advantage for us”, says Crister Fritzson, President and CEO of SJ AB.

The company has decided to upgrade instead of investing in new rolling stock. The X2000 trains are optimised for Swedish conditions, but they have reached the end of their technical and economic lifetimes.

The X2000s were the first high-speed trains built in the Nordic region. With an average speed of 150 km/h and a top speed of 210 km/h, they are still the fastest in the Nordic region. Built in the early 1990s as a premium vehicle, these trains are equipped with tilting bogies better adjusted to the often curved railway tracks and the climate.

Once completed by early 2019, the upgrade will extend the lifetime of the fleet by at least twenty more years.

“We are replacing both the heart and the brain of the X2000s—their engines and control systems. The upgraded high-voltage and auxiliary systems on trains will lead to reduced power consumption”, Mr Fritzson continues.

“We will install energy meters on all the trains, which will allow us to monitor the use of energy and follow up on the environmental effects of our investment.”

Much of the interior, for instance the doors, toilets and seats, will be also replaced. The company has also developed a plan for sorting and recycling the replaced parts. SJ is also set to monitor its suppliers’ waste management and treatment during the upgrade project.

The time is right for investing in the high-speed segment, because more and more passengers are choosing trains over cars or planes.

“The most important thing is for the upgraded trains to be an attractive choice for our current and future customers. The environment will benefit every time a customer chooses to travel by train”, says Mr Fritzson.

The shorter travel times and hourly departures, in combination with comfort, make the train a reliable alternative to cars and planes, both far more polluting transport modes. Environmental considerations and awareness also play an important role: many people choose SJ trains because they are run on renewable energy.

In summer 2015, the passenger turnover on the Stockholm–Gothenburg stretch reached a milestone of 10 million passenger-kilometres per month, up 10 per cent on a year ago. Stockholm–Malmö traffic expanded by 5 per cent. SJ has doubled the number of seats to 600 on the most sought-after departures of the X2000s.

The company forecasts that travel by train between Stockholm and Gothenburg or Malmö will continue to increase by some 5–6 per cent a year.

“Our market is business travellers, to a large extent. They appreciate comfortable travel time. People use trains to relax, socialise or for work, since modern trains offer the necessary fittings and Wi-Fi. Driving or flying can hardly compete with this”, Mr Fritzson explains.

The success of the railway operator would not have been possible without upgrading the infrastructure. The government investment programme started in 1991, with SEK 5–10 billion spent annually on modernising infrastructure and increasing its safety. As a result, the Swedes have returned to the railway platforms: during the 2000s, the number of trips by train in Sweden exceeded the 1940s level, which until recently was considered the heyday of the country’s railway passenger transport.

As the state keeps improving the railway network in the country, SJ is gearing up for new high-speed links and faster trains. The lines from Stockholm to Gothenburg and Malmö, Sweden’s most populous cities, will be further improved, and the first 150-kilometre section launched in 2028.

“This will allow us to offer even faster train connections with a maximum speed of 320 km/h. Higher speeds will obviously require new rolling stock”, says Mr Fritzson.

Passenger railway traffic has now been deregulated for five years, and the former monopoly holder, SJ, is now competing with a number of domestic and foreign players. In the shorter term, the company is establishing itself as a regional carrier.

Its trains are already now calling at Copenhagen Central Station, just a short extension over the Øresund Bridge from Malmö. In summer 2015, SJ launched an X2000 service from Stockholm to Norway’s capital, Oslo. The carrier expects that the high speed of the route will quickly lead to a 20 per cent increase in train travellers on the Oslo link.

“We believe that competition contributes a great deal to promoting trains as a great way of travelling. The more products there are on the market, the faster the market will grow. Since the introduction of competition, we have only seen increasing demand. Competition sells”, Mr Fritzson concludes.

 
Sep 2015
  • AR2015

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