"Slovak, Polish, and Czech Companies Withdraw from DAC Testing Over Funding Dispute. They Are Rather Angry," Says Jan Sechter

Digital Automatic Coupler (DAC) testing cannot be effectively done via the CEF funding. The project is at an impasse due to the pursuit of this option. An analysis of the latest developments and planned next steps is brought to you by RAILTARGET in an interview with Jan Sechter, Chairman of the Transport Section of the Czech Chamber of Commerce.

Czech and Slovak companies were involved in preparations for the implementation of Digital Automatic Coupling (DAC). You have been involved in the process from the beginning—how has the project evolved, and how was the issue of financing addressed?

DAC (Digital Automatic Coupling) is a completely new technology that requires a complete retrofit of freight wagons across the European railway sector. It’s not just about producing new railway wagons with a different coupling mechanism but also about modifying a large portion of the existing fleet. It is a massive pan-European issue that cannot function without a coordinated approach.

As Deputy Minister of Transport, I was already working on this issue, but compared to other priorities such as ETCS implementation or high-speed rail, DAC was seen at the time as a future concern. However, even then, there was a group of companies that wanted to move forward faster because they believed it would help reduce labor costs in train formation. The motivation for digitalization was particularly strong in countries with higher labor costs.

This, however, sparked opposition in Central Europe, including the Czech Republic. Both the national operator and private players, such as Metrans, were highly skeptical. They did not see a real business benefit in DAC and, most importantly, there was no clear answer on who would pay for it.

That is why, together with then-President of the Czech Chamber of Commerce Vladimír Dlouhý, we decided to take action. We engaged in discussions with the entire sector to understand why the opposition was so strong and what companies would need to get on board with the project.

What were the main reasons for opposition to DAC implementation?

It turned out that companies were not fundamentally opposed to DAC. If the technology were already available and someone installed it on all wagons tomorrow, they would be ready to use it. It is already used in the United States and other parts of the world.

The real issue was that no one knew exactly what DAC implementation would entail—how it would affect train formation, maintenance, inspections, and the total investment costs. The hesitation was not due to resistance but rather a lack of information.

That’s why, at the end of 2022, we proposed to EU Transport Commissioner Adina Vălean that DAC should be tested in real operations. In January 2023, on behalf of Vladimír Dlouhý, we sent an official letter from the Czech Chamber of Commerce.

How did the European Commission react to your proposal to test DAC?

Very positively. We spent a lot of time promoting DAC testing across Europe and gained many allies. The European Commission confirmed that this approach made sense, and that funding could be secured through Europe’s Rail, an institution dedicated to railway innovation. At the time, it was led by Carlo Borghini, now Giorgio Travaini.

On this basis, we began assembling a consortium of companies interested in participating in testing. It included rail operators, maintenance firms, and manufacturers, with additional participation from Polish and Slovak companies.

However, at that time, it became clear that DAC technology was delayed—particularly in its electrical and digital components, which did not meet the necessary European TSI standards. We even worked to get a Czech representative into the standardization group in Brussels, which we ultimately achieved.

The key realization, however, was that it made no sense to test an incomplete product. As even representatives of Deutsche Bahn told us, "There’s no point in testing an unripe banana." In other words, testing would only be meaningful once the technology was truly ready.

When did the project start facing complications, and what was the first warning sign?

Everything looked promising. We had a plan, the European Commission’s approval, and a solid consortium. The rest of Europe followed our lead and planned its own test routes. But then Engelmann got involved.

Engelmann, an advisor for Deutsche Bahn, pushed for an alternative funding model via the CEF fund. However, CEF primarily funds infrastructure, not operational costs. Despite this, Engelmann presented it optimistically, claiming that not only would CEF cover 50% of costs, but that operators wouldn’t face any additional expenses.

He reached out to all companies that had initially signed up for DAC testing through Europe’s Rail and convinced them that his approach was better. The problem? Companies were then asked to pay an entry fee of €15,000, which sparked dissatisfaction—since the original plan assumed that testing would be fully covered by European funds.

When did it become clear that Engelmann’s plan wouldn’t work?

By the end of last year. The European agency began signaling that operational costs would not be recognized as eligible expenses. In the end, Engelmann himself had to admit that his solution wouldn’t work.

The companies involved were understandably furious—especially in our region (Czech Republic, Slovakia, Poland), where cost structures are different from those in Germany. Operators withdrew as soon as they realized they would have to partially finance the testing themselves. Engelmann had good intentions in trying to find a solution, but in the end, his approach led the project into a dead end.

What happens to the DAC project now?

We are now trying to return to the original plan. Europe’s Rail has been a committed partner from the beginning, supporting real-world testing. We’ve lost time, but in the meantime, DAC technology has continued to develop.

Our goal is to restart negotiations with Europe’s Rail and find a funding model that works for the industry. While CEF remains an option, its primary focus is infrastructure funding, whereas Europe’s Rail is much more flexible and directly supports the development and implementation of new railway technologies.

To put it simply—if we go back to the original approach and conduct testing within Europe’s Rail, we still have a chance to save the DAC project for Central Europe. We are currently preparing a letter for Giorgio Travaini and will begin discussions with him soon.

Jan Sechter

Jan Sechter is a Czech diplomat. He previously served as Deputy Minister of Transport, focusing on railway transport and European transport strategies. He was also the Czech Ambassador to Poland and Austria. He currently holds the position of Chairman of the Transport Section at the Czech Chamber of Commerce, which partners with RAILTARGET at select international events and trade fairs.