Support Scheme for Funding Railway Freight Companies' Fitment of Locomotives

The Danish parliament has granted 55 million DKK in a support scheme for funding Railway Freight Companies' fitment of locomotives with ETCS. The EU Commission has approved the support scheme, where it will be possible to compensate up to 50 per cent. of the cost of purchasing and installing the new train control equipment. This is a direct subsidy for eligible railway undertakings, which are compensated for the expenses they will have in connection with the transition from the Danish ATC train control system to the new ERTMS system. Both STM-DK and ETCS devices are eligible. Compensation is granted upon application.

Application period
The support scheme is expected to come into force on 1 October this year and application must be submitted by 31 October 2020. It will be in accordance with the first-come-first-served principle. The scheme will end when the available budget is exhausted or at the scheduled end date, whichever comes first.

Conditions for receiving funding
A grant of up to 1.2 million DKK can be granted per. unit for the first freight locomotive in a series (First-of-Class) to be equipped with ERMTS, and a subsequent support of up 0.5 million DKK per. unit to the subsequent series locomotives in the same series. Both the STM-DK and the ETCS are eligible.
In view of the EU guidelines for state aid to railway companies, the maximum aid that can be granted is up to 50% of the eligible costs. Certain conditions relate to receipt of funding, including:

  • Costs associated with the purchase and installation of ERTMS train control equipment for each locomotive can be documented
  • Applicant is in possession of a valid APIS (Authorization to Place In Service) for that locomotive
  • The connection of the individual locomotive to the Danish rail network is documented (at least 50,000 km / 5,000 hours over a five-year period):

A. Existing railway undertakings may document this on the basis of the historic drive of the locomotive but shall be obliged to continue this operation in the following five-year period. If prepayment is requested then a funding guarantee is required.

B. New railway undertakings must document that beneficiary locomotives will drive the required number of kilometers / hours over the next five-year period, and a funding guarantee is required.

Questions for the application round can be submitted to the Signalling Programme at info_onboard@bane.dk. The Signalling Programme will attempt to respond within five business days. Below you can see the questions that have already been asked in connection with the application round. They are divided by the dates they have been received by the Signalling Programme.

FAQ 31-10-2017

Banedanmark expects that the applicants in this section of the application form gives a thorough and full description of the project, that the railway freight company is establishing to facilitate the installation of ETCS.

Under the section Activities, the lead activities are described as well as who is thought to perform the assignments.

Under the section Suppliers, the name of the supplier is stated, along with a description of the process which has led to the binding offer or contract, as well as which agreements has been made regarding the future collaboration.

Under the section Economy, the background for the project budget (presented in appendix A) is described, as well as clear references to appendix E and/or F, to clarify the specific references between the offer and project budget.

Under the section Schedule, the final or preliminary schedule, as agreed with the suppliers, is described.

Under the section Other applications/agreements for financial support there is to be stated:

  • Who is applied for financial support
  • What are the subjects to the potential financial support (which locomotives of those indicated in the application)
  • How much financial support there is applied for
  • Status for the decision process and expected date for announcement of decision

FAQ 27-10-2017

The support scheme is based on getting freight locomotives operating with ERTMS Baseline 3 Level 2. But since there are no Danish lines is in operation with ETCS Level 2, APIS for Level ATC will be accepted until it is possible to obtain a Level 2 APIS on Banedanmark's network.

When it is possible to test Level 2 on Banedanmark's infrastructure, the beneficiary will be notified. Then the freight locomotive must complete all tests necessary to get an APIS for Level 2 as soon as possible and within 12 months of the notification at the latest.

It must be specified that it is only when APIS for Level 2 is obtained, that the required approval of the freight locomotive is final. Prospective provision of guarantee will not be released before the final approval.

If the freight locomotive does not get APIS for Level 2, paid subsidies will be demanded repaid.

At the time of application, the following technical documentation should be enclosed as Annex G:

1.  Constituent certificate including Technical file.

2.  Plan for compatibility testing in lab and on lines.

Before the payment of the last funding part – and in order to avoid repayment demands for funding paid in advance – the following documentation should, in accordance to the application form, be present:

1. Constituent and subsystem certificates including Technical files.

2. Test report for successful compatibility test with BDK Joint Test Lab in accordance to Alstom and Thales signalling systems.

3. Test report for successful compatibility test on BDK infrastructure equipped with Alstom and Thales equipment respectively.

Please find attached the latest version of Authority Approval Process Plan agreed upon with NSA (Trafik-, Bolig- og Byggestyrelsen).

Please note that the site test required for final approval for ERTMS level 2 on Danish trackside projects are defined in this document. This document can be used for inspiration.

The lead time for booking a test slot is approximately 4 months. Banedanmark suggest basing an agreement on a specific request from the Railway Undertaking for test slots based on input on what should be tested.

The first electrified line in service with ETCS, which are planned to be electrified, are Copenhagen - Ringsted, which will be commissioned in December 2018. At the present time, it is uncertain which signalling system will be utilized at the time of commissioning and whether it can be used as a test line. The next relevant line is Køge - Næstved (mid-2020).

It must be emphasized that this support scheme is not dependent on a contract with a particular supplier of ETCS onboard equipment.

If the applicant Rail Freight Undertaking has been listed as co-order signer on the tender for the framework contract regarding ETCS onboard equipment and had locomotives on the A-list at the time of signing the framework contract, an updated Sub18A contract (subcontract under the framework contract between Alstom and the Signalling Programme) will be sufficient for an application.

An application for funding must be based on an updated contract / offer in order to support to calculate the grant correctly. The versions of Sub18A, previously submitted by Alstom and received from the Onboard Project, cannot be considered as updated. The Onboard Project of the Signalling Programme can, if requested by the Railway Undertaking, provide assistance about a request to Alstom to update the previously submitted Sub18A so that it is ready for signature and can be used as documentation for the application for funding.

Finally, it must be specified that if a Railway Freight Undertaking decides to get their freight locomotives equipped by another supplier or at a different price than originally stated in the documentation submitted, it is mandatory to submit a new application for support.

FAQ 12-10-2017

No, GSM-R as cab radio is not part of the train control system.

The commitment and support amount is given to the individual Railway Freight Undertaking, and the bank guarantee / floating charge is linked to the company that has received commitments. In case of a sale of the locomotive before the application criteria is met, the new owner can maintain commitments / disbursements with equivalent collateral in the form of bank guarantee / business lease and fulfillment of the relevant application criteria. If this is not desired, support commitments will be waived and any paid support must be refunded by the recipient.

In the event of bankruptcy at Railway Freight Undertaking, a claim will be made against the bankrupt estate in respect of repayment of the funding already paid. Also, Banedanmark will seek compliance with bank guarantee / floating charge (virksomhedspant) to the extent that it is not released at the time of the bankruptcy. If the bankruptcy estate sells the locomotive, the new owner can maintain commitments / disbursements with equivalent security in the form of bank guarantee / floating charge and fulfillment of the relevant application criteria. If the bankrupt estate or a new owner does not wish to enter the scheme, any commitments will lapse and any payments received will be reimbursed.

Questions may be sent by e-mail info_onboard@bane.dk. The Signalling Programme will attempt to respond within five business days.