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Addressing the impact of the introduction of DAC on business of companies in the rail sector is crucial, says ERJU CEO Borghini

Addressing the impact of the introduction of DAC on business of companies in the rail sector is crucial, says ERJU CEO Borghini
photo: RAILTARGET/Addressing the impact of the introduction of DAC on the business of companies in the rail sector is crucial, says ERJU CEO Borghini
29 / 11 / 2022

RAILTARGET presents you with an exclusive interview with Carlo Borghini, Executive Director of the Shift2Rail Joint Undertaking. The topic of the interview is Digital Automatic Coupling (DAC). What is the timetable for the couplers' introduction in Europe, and how does Carlo Borghini see the issue of financing this technology?

We are currently located at the DAC seminar in Bratislava. I would like to ask you how do you find today's seminar and how do you evaluate today's discussion? Why do you think it is important to host these events?

It's important to us, this event, and the region because the implementation and deployment of the DAC will touch each cargo company all around Europe. Although the technology is not completely mature, it's the moment when we need to start to discuss with the sector, with each company, their views on how they see the impact of the DAC on their business. It is the objective of today, and this is a big opportunity for us and the sector to discuss it.

You mentioned that the two types, specifically type 4 and 5 of DAC technology, need to be tested by 2025 to finish the implementation of DAC to freight trains by 2030. Do you think it is a real vision?

We need to split it into two parts. The first is the obligation we have contractually, as the project will be running for the next two years to deliver the technology, and this obligation is really targeting to reach the DAC-5 because it means unmanned operation both for coupling and uncoupling. It means that in the shunting yard, we will not have people, and it will be a safe environment. It maximizes the performance of the system. The second step is when we start the possible deployment. Clearly, in a perfect world, the initial plan is to start in 2026 and finish by 2030. But the first analysis shows that the plan is extremely difficult to be achieved and comprised. So whatever delay will be taken in the design of the DAC, the validation, the testing, and the demonstration, will simply move the full package of migration and deployment in the same manner. So it will be moving like a block in the future. It's clear that it's not only technology, but the starting point of the migration and deployment needs to make sure that all the elements are present and ready to be understood and shared by the sector at the European level.

Nowadays, financing DAC is still a huge question for all transporters and owners of vehicles. It has been mentioned today that there should be a concluded contract for the implementation of DAC in a matter of weeks. Could you give us a small comment about this?

What I was referring to before is that, at the moment, we are signing the grant agreements that will be ensuring the finalization of the technology so during the next four years, there will be the finalization of the technology and the validation of the technology demonstration at, let's say, a prototype level. And the second phase will be at the large-scale level, with several trains running around Europe. In terms of financing and funding, it's really important to understand the fact we expect the DAC to bring, in the medium-long term, a return on investment, on top of safety, operations, and so on. Maybe it will be distributed differently among the cargo operators, infrastructure managers, etc. It has to be managed. It's clear that there's a major gap between the cost at which the deployment will start and the return on investment. And this gap from the discussion with the sector, the sector itself will not sustain. So there's a need to think which are the ways that we fill this gap and all ways we redistribute the return on investment. That's the concept behind the founding plan.

Could you briefly describe, what the options for changes are in the indicative overall time plan which you mentioned at the seminar later today?

The options have to be designed by the sector, so the objective of this seminar was to start this discussion, and, based on the outcome, we need to bring together the European map and decide which approach will be agreed to for the future deployment and the timeline. It's important that we join and share views on which direction to take.