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Groundbreaking perspective

– In Sweden the responsibility for the procurement and administration of regional local rolling stock falls to the company Transitio. Our model could also be a positive solution for Norwegian metro lines that cross county borders, such as the Fornebu line or the extension to A-hus," says Transitio's CEO Stefan Kallin

In Norway, local public transport is the responsibility of the county councils, which can pose challenges when lines cross county borders. A relevant example is the metro to Fornebu, which covers both Oslo and Akershus. For several years the county border was found to be a restrictive factor for the implementation of a regional rail solution that would link the Fornebu line to the existing rail network in Oslo.

Similar challenges could occur for other cross-border railway line sections such as an extension of the existing metro network into Ahus. A crucial factor will be to determine the correct interface in relation to acquisition, financing, ownership and administration of the fleet of metro carriages. Within Oslo, this responsibility is currently fulfilled very well by Oslo Vognselskap.

– A good idea could be to organise the responsibility for carriages in cross-border lines using the same model we use, says Stefan Kallin from the Swedish multi-regional train company Transitio. Kallin has been the CEO of Transitio since 2011. Prior to this he was responsible for procurement, administration, development and decommissioning of the entire rolling stock at Storstockholms Lo-kaltrafik (SL).

It did not seem very efficient for 20 regions to develop their own organisation and gather expertise in such a narrow area.

Gathering expertise

Until the late 1980s, Statens Järnvägar (SJ) in Sweden was responsible for the procurement of suitable rolling stock for both regional and interregional train traffic. But in the early 1990s, the responsibility for train traffic was transferred to the regional traffic princi-pals, while SJ was reorganised. The responsibility for the infrastructure was transferred to the newly established Banverket (now Trafikverket). In the new organisational model, SJ could no longer be responsible for the procurement of regional rolling stock. It was now up to the regions to procure and administer rolling stock on their own.

– It did not seem very efficient for 20 regions to develop their own organisation and gather expertise in such a narrow area. In 1999, the regions therefore agreed to pool the responsibility for procurement and administration in a joint carriage company called Tran-sitio, Stefan Kallin explains.

– A crucial premise for this decision was the acknowledgement that the procurement of trains is a very long-term investment. If this long-term perspective is forgotten, the risk of the stock deteriorating becomes great. It is therefore crucial to gather expertise and prepare functional administration plans.

Transitio has helped the regions secure a better position for negotiation with train manufacturers.

Savings and efficiency

Transitio's first assignment was to initiate negotiations concerning the procurement of rolling stock for the various regions. The exceptions were Stor-Stockholm, Skåne and Västra Götaland, which were so large that they managed their own procurements, with Transitio acting as an adviser, or sometimes a project manager, instead.

– Transitio has helped the regions secure a better position fornegotiation with train manufacturers. We have also standardised the requirements better, which also results in lower prices. Transitio also has access to a few spare trains that can be utilised when the ordinary fleet of carriages is taken out for extensive maintenance or periodic refurbishment.

The Transitio director also explains that framework agreements have been entered into with several major train suppliers, agree-ments that, among other things, ensure short delivery times for new stock. The framework agreements ensure that there is contin-gency in place when our owners task us with the acquisition of new trains.

Extensive corporate governance

– The ownership of rolling stock falls to Transitio and all costs are covered through rental con-tracts with operators. The aim of the company is to achieve an annual performance that breaks even.

The regions were previously jointly and severally liable for the overall fleet of carriages but the financial liability has now been split individually. With regard to railway lines that cross regional borders, this is not something that Transitio deals with directly.

– We only manage the fleet which is earmarked for use in the lines concerned and the regions reach agreements between themselves.

Transitio's board of directors comprises representatives from the owner companies, often the CEO, whereas the chairman of the board is external. 

There is also an owner’s advisory board consisting of politicians from the seven regions that have purchased most rolling stock. The owner’s advisory board meets with the board of directors at least twice each year.

– So far all of the parties appear to be very happy with the solution, concludes Stefan Kallin, CEO of Transitio.

Turnover: NOK 473 million (2014)
Number of employees: 14
Balance sheet assets: NOK 2,54 billion (2014)
Number of trains: 135 in five different series
Profits and losses: NOK 0 million (2014)

Stefan Kallin (56) has been the CEO of Transitio since 2011. He was previously the Head of Rolling Stock in SL (responsible for procurement, administration, development and decommissioning of rolling stock), a consultant to the railway industry and has held a number of positions in SJ, including product and sales manager, project management and head of workshop.

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