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European rail freight needs to evolve, and the DAC is the key to it, says Carlo Borghini, CEO of ERJU

European rail freight needs to evolve, and the DAC is the key to it, says Carlo Borghini, CEO of ERJU
photo: RAILTARGET/European rail freight needs to evolve, and the DAC is the key to it, says Carlo Borghini, CEO of ERJU
13 / 12 / 2022

With the DAC topic being one of the most relevant discussions in the railway sector nowadays, RAILTARGET presents you with yet another interview from the most prominent railway event of 2022, InnoTrans. Carlo Borghini, CEO of ERJU, spoke about the importance of the DAC for Europe's future, the development plans, and the funding issue.

Do you think that Europe is ready for DAC? For this project?

We have been working for the last, we say, four to five years in the European DAC delivery program to move on to the future deployment of the Digital Automatic Coupling, and this is based on work that had been going on already before shifting to rail program on IP5, as well as work done as it was discussed today in the workshop before. So, we are ready to move with DAC deployment, but we need many elements to be there. We have discussed the need to define a clear migration plan, and we need to have an investment plan. We need to define and analyze all the detailed specifications and address other technological and operational issues. But Europe has a need to evolve from rail freight to create a performance of the rail freight that is demanded by the clients. And the DAC is really one of the keys needed in this respect.

And do you have any schedule by the year for how this will go and continue with the DAC?

Let's say that the target that we are giving to ourselves because we are planning the works, is 2030. 2030 is the end of this decade. It means that we need to take serious steps that were mentioned before that need to be ready by 2025 or 2026 in order to be able to start the migration to the DAC. What does it mean? It means that by these dates, 2025-2026, we need to have cleared the available funding, the migration plan, and so on, in a manner that the supply industry can start the industrialization processes for the wagons, for the locos. The operational solutions have started to be prepared. Clients should be informed of possible migration, workshops, staff, and all these steps have to be done. So this is clear that this plan is a high-level plan with a target indicative date, but it can evolve with time.

Do you think that there could be any concerns in the interim period of DAC after 2030? I mean, hybrid coupling or something like that?

The migration plan is designed up to now in a manner that, by the introduction of the DAC, we reduce at the minimum the risk of disruption created by the double solution. It is the reason why we are working together towards a European solution, a European migration plan. So the idea will be to ensure that, by when the full DAC deployment takes place, we will have addressed all the shortcomings and have all the elements that will allow one single European DAC in place.

And here in the discussion, ČD Cargo opened the topic of the financial task of the DAC. What's your opinion? Should the EU prepare some dotation for the wagon keepers?

The question of the funding or the financing is put on the table today by ČD Cargo but is not new. It is for all European sectors. We have a gap. The gap that we need to sustain the cost at a certain time, maybe in the next 4-5 years, and the return on investment, as we heard from the economic studies, can be in the long term. We need to fund this gap. And this gap is to be funded with a combination of resources. The sector is asking for public funding to cover the gap up to a certain point and a combination of private funding. Clearly, the mix of the two will depend on how we are able to build the business case. The DAC is an enabler for the capacity and will help the climate change aspects. It will support energy efficiency, which is one of the critical elements today. It will also support the implementation of automation and so on. So I think what is being put today on the table in the discussion about the funding and financing is a requirement that it should be clear before we are going to have a close, firm commitment of the sector to do it, that we need to address the funding and financing as well as the technology, the final operation and the different type of solution.

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