The misadventures of AnsaldoBreda and the Dutch high speed line

[Densha]

Many of you will probably have heard of AnsaldoBreda before, an Italian company that usually produces scrap metal on wheels.

It's infamous for the problems and very late delivery date of the Danish DSB IC-4 and IC-2 DMU's and so far I know there were problems with light rail/metro vehicles in the US and other countries too. New to me and what I just discovered is that there appear to be a lot of problems with the Norwegian NSB BM 72 EMU's as well.

 

On to the Dutch railways. The order for the V250 for use on the new high speed line was placed in 2005, the trains would have been delivered in 2007. Meanwhile there were problems with the safety systems on both the Dutch and Belgian part of the HSL-Zuid from Amsterdam to Brussels so there wasn't any train that could use the line anyway. After a long period of fooling around, in 2009 finally the Thalys service from Amsterdam to Paris was able to use the HSL-Zuid, at 300km/h, if it would actually reach that speed in the short distances. In the same year an intercity service from Amsterdam to Breda started on the high speed line at 160km/h, and the first V250 started its first test runs in the Netherlands. It took them from that date on to mid 2012 to 'fix' the trains (both 'hardware' like the engines and software problems). In the last 6 months of 2012 the V250 has been used for irregular passenger services as the 'Fyra', until it finally replaced the older 'Beneluxtrein' services to Brussels on 9 December 2012 it was supposed to replace in 2007.

 

Since the first day of service from Amsterdam to Brussels almost all trains failed to reach their destination; some trains didn't stopped moving at some point or something else was blocked or failing. Recently some train drivers told that the safety system of the V250 didn't know whether a train was moving forward or backwards and that there were tons of software problems. Meanwhile it became winter in the Netherlands and apart from the powder snow blowing into the electronics that all trains except for the pre-'90s trains have problems with, there was some ice on the tracks that hit the bottom of the train at 250km/h which resulted in a lot of damage to the electronics and made the covers loose and drop on the tracks. That happened on the last month on January 18. The Dutch railways immediately scrapped all Fyra services and the Belgian railways revoked their license for the train series. From that date on until today there has been no intercity service between the Netherlands and Belgium at all.

 

The Fyra services already skipped the stations of The Hague, Dordrecht, Roosendaal en Mechelen, opposed to the 'Beneluxtrein' that stopped on those additional four stations too. This all to increase speed, but of course that results in a lower occupancy rate and inconvenient connections especially for people living south of Rotterdam. They were doomed to take an intercity train to Roosendaal, take a local train service from the Belgian railway, and then change to another intercity to get to Brussels. Many people didn't want to pay large sums of money for a previously short and cheap trip either, so they used that route as well. They even had to couple additional EMUs to the previously empty and short local services because there were too many people waiting on the platforms to fit in the trains. From January 18 on the Belgian railways started an additional intercity service between Roosendaal and Antwerp to compensate a bit more but obviously a 2-car train can't compare to a 6-7 car train used with the Beneluxtrein services.

 

After pointing fingers to both the railway companies, AnsaldoBreda and the parliament they decided to first set up a replacement intercity service. So from February 18 on two times a day there will be a intercity The Hague - Brussels and from March 11 eight times a day with the Beneluxtrein stock.

 

Meanwhile AnsaldoBreda isn't able to solve the problems with the V250 and the Belgian railways are raging, as are the Dutch railways that mean the same but do it with a smile.

And even more recently is the news that all trams from AnsaldoBreda in the Swedish city Göteborg have been taken out of service because of corrosion, not to forget the problems that already were playing with the trams in Göteborg.

Just after that, the news came in that the CEO of the parent company of AnsaldoBreda, Finmeccanica, has been arrested for corruption. Not to forget that Berlusconi presented Qadhafi with a Danish IC-4 in Libia. (http://www.railway20.net/2011/02/the-case-of-muammar-gaddafi-gift-train/)

 

To sum it up:

AnsaldoBreda produces defective trains, generally 5 years too late, there isn't anything that is still working, and they are corrupt.

 

(Now I almost wrote an essay, and the source is my head. There's even more to find on the internet.)

[ToniBabelony]

The reason AnsaldoBreda still gets orders from railway operators, is the EU. The EU forces railway operators to also place orders at the smaller companies, like AnsaldoBreda, instead of only Siemens, Bombardier or Alsthom. I think, partially this is a good idea, but in the case of AnsaldoBreda, this is a terrible solution.

 

If it wasn't for the EU, the Dutch Railways (NS Hispeed) would have chosen for a slightly modified version from the Velaro (ICE M3) from Siemens. This train is already in service for quite some time, the Dutch Railways already have experience with it, there was a new version coming out anyway (Velaro D), which also can run on UK tracks, so a direct Amsterdam - Brussel - London link could have been established in the future as well.

[bikkuri bahn]

Hitachi had shown interest in purchasing AnsaldoBreda last year. I don't know what became of that- if they walked away from any deal all the better, it seems.

[Densha]

Exactly Toni, it has to do with the contracting that the EU demands of course. But it's really unfortunate this kind of things are the result sometimes. The Belgian railways told in the news that there were seven companies that were interested in building the trains, but 19 trainsets was a too low number to set up a complete production line for six of the companies so only AnsaldoBreda was the only option left. The former CEO of the NS said that he didn't even know of any problems that had to do with AnsaldoBreda.

Anyhow, there's so much wrong with the whole order of this train and if all goes well there will be a complete report on all problems by the government in April. Hopefully that will give more information.

[ianlaw]

It's relatively simple to write a tender request in such a way as to exclude certain companies if you really want to (and still abide by the EU regulations). But its likely the whole process was run by lawyers with no engineering experience of even railway experience who were only looking for the lowest price. I know that at the time in the "hobby railway scene" everyone knew about the poor track record of this company and doubted the chance of the trains being delivered on time and according to spec.

Maybe they can cancel the order and demand compensation but that won't change the fact that it will take many years to buy other rolling stock.

Edited February 17, 2013 by ianlaw

[Jace]

To sum it up:

AnsaldoBreda produces defective trains, generally 5 years too late, there isn't anything that is still working, and they are corrupt.

 

That seems a little harsh! I've worked on several rail projects with a number of different manufacturers (though not Breda). Some of these projects didn't turn out so well, one was arguably far worse than either the IC4 or the V250 in that the cars still haven't run (and likely never will) due to a very fundamental design flaw caused not by the carbuilder but by the railroad's misunderstanding of their own system. The only saving grace was that it was an order for non-revenue equipment and thus had far less visibility politically. 

 

Based on this, my general reaction to these types of stories is a bit different: carbuilders do screw up, sometimes royally by overcommitting, getting in over their heads, etc., but don't only look at them. A carbuilder is required to build to a specification. The specification can be wrong, often thanks to competing goals (high strength but low cost, high strength but low weight, advanced design but proven reliability...), which will make compliance difficult to impossible. When I see that only Breda put in a competitive bid on a job out of seven possible suppliers then that tells me that it is very likely that either the spec or the contract terms contained a lot of high risk features that made six of the suppliers very nervous (unrealistic schedule or performance goals, high penalties, etc.).

 

Sometimes carbuilders are simply desperate for work - they like to keep their production lines running all the time - and will low ball a project just to keep the lights on. Other times they take a calculated gamble; the industry is often not so much about who builds a better car but rather who is better at assessing the risks. Shame on Breda for not identifying all the risks or pricing them accordingly, but how about shame on the SNCB/NS as well for quite likely putting out a high risk contract? Such a contract of course would be a feather in the cap for the politicians should it have worked, but when things go wrong, the most expedient thing to do is to blame the carbuilder. It's a tough business...

Edited February 17, 2013 by Jace

[miyakoji]

Jace - interesting comments. I've read some criticism about custom designs versus existing designs by the manufacturer ('off the shelf' was the phrase used, I think). Do passenger railroads have such specific needs that they really can't go with existing designs? I assumed that the existing designs were considered to be better because the manufacturer had already ironed out all the bugs.

[Jace]

Miyakoji, funny you should ask that because I was just working through this in my head!

 

The passenger railcar market is interesting in that you have relatively few, large, long term and mainly government funded projects. These characteristics interplay with each other to create an unusual and complicated dynamic.

 

From an elected politician's point of view, the project with the highest potential reward is high risk and low price. If everything works out as intended, they're forward thinking leaders and will quickly move up through the ranks. It's the complete opposite for a carbuilder; their optimal project is high price and low risk, an overpriced off the shelf design in other words. For a railroad or a passenger, you want something else entirely: a low risk, low price car. Ideally, you'll end up somewhere in the middle. In reality, what often happens is far different.

 

A low risk project will typically get a low price - anyone and everyone can build this car. Unfortunately neither the carbuilder nor the politicians are happy. A standard design at a high price is politically suicidal (how could you possibly spend so much on that?) so carbuilders often try and increase their margins by protecting their product in a politically palatable manner. Patents or restrictions like local manufacturing content requirements are common. Free trade agreements tend to limit the effectiveness of these protections.

 

A high risk project should get a high price, but unless there is some mechanism in place to exclude risky suppliers and therefore jack up the price, you commonly end up with a (politically desirable) low price. Here's why: the relative scarcity and long term nature of these projects results in big production swings. A manufacturer wants to keep these to a minimum so they have a tendency to low bid and take more risks when they see a gap in production looming. If no one cares about a shutdown, then carbuilder won't have to gamble on a dicey project and off go the lights. However, a company like Breda may be more likely to take these risks because there will be a high political price to pay should they shut down the factory even for a short term (knowing a little about Italy, I believe this to be the case). Compounding this would be if their production cycle is in phase with the market; that is they run out of production right when the market drops.

 

What can get lost in this calculus is what the railroad and the passengers ultimately want: low risk, low priced equipment. Taking the politics out of the purchasing process through privatization is not the solution unless you also take away the political costs in closing the factories (or more precisely, the benefits in keeping them open) as well as the political benefits should the trains be a success. Getting rid of the railcar factories almost entirely as has happened in the UK solves the problem with the former. The latter may have to be addressed through changing the political system or, again like the UK, by making the railroads politically toxic in other ways - in their case, by increasing fares and decreasing service quality. An alternate solution is to follow the JR model: develop your own designs and have multiple carbuilders produce them through some sort of licensing system. This works best when the demand is consistently large and the government is willing to impose and then defend market restrictions.

Edited February 17, 2013 by Jace

[Densha]

Jace,

I intendedly leaved the politics apart from the whole manufacturing process. The Dutch politics and railways indeed didn't pay enough attention when placing the order, but AnsaldoBreda did take an order that they weren't able to carry out. Apart from that there is more to the Dutch high speed line concerning politics, there have been reports being held back and other decisions that were made wrong. There's no Dutch railway stock manufacturer left since the '70s, so all is carried out by international manufacturers.

Of course it's not unusual that there are problems with new trains but after one year or so it's usually solved. The new SLT stock produced by Bombardier have had about two years of software errors but now everything is solved. The V250 should have been in service in 2007 and it's still not. The reason the safety system of the V250 doesn't behaves correctly appears to be related to outdated equipment, not exactly new.

All in all I still find that the order shouldn't have ever been placed at all because they knew of previous problems in Denmark etc. but the fact that AnsaldoBreda isn't able to deliver working trains is pretty bad.

[Jace]

But Densha, politics has to be considered because it is a vital part of the process. Politics created what looks from the outside to be a high risk contract and politics is what drove Breda to accept such a contract (but not for the reasons one would normally expect as I discussed earlier). With a project like this, technical issues quickly become political liabilities and when that happens, the whole nature of the project fundamentally changes. Everything and I do mean everything is looked at under a microscope. The best a carbuilder could hope for is no additional problems while at the same time realizing that the project will in all probability result in a big financial loss (the Siemens built SNCB class 18 comes to mind).

 

I know of a project that had a potentially catastrophic problem: bearings were failing at a high rate. The whole fleet could have been grounded which would have had an enormous impact on the number of cars available for service, but somehow the press never got wind of the problem. The technical issues were solved and the cars stayed in service but risks were taken to make that happen. This would have never, ever happened in a politically charged environment. Instead, the story would have been all over the newspapers and since political lives were now at stake, the carbuilder would be given no room whatsoever to operate; absolutely no technical risks could be taken to solve the issue. If they fail to perform, which is now very likely, there will be further bad press as the politicians now have much more to gain by saying "bad carbuilder!" than they do in taking chances to help work out the problem. There will also be lots of talk of big penalties (above what was agreed to in the contract) as this becomes the most politically advantageous thing to do. The carbuilder then has very little protection (politically or from the contract itself) and somehow has to make the best out of a very demoralizing and financially dangerous situation. The results can and do snowball very quickly and finding a way out becomes more and more difficult. This is how I see the IC4 project.

 

A little more than a week ago, the Chicago Transit Authority announced that they will be requesting bids on up to 846 new 7000 series cars. The Mayor was mentioned twice in the CTA's press release. This comes after the Mayor very publicly got involved last year in a technical issue on the 5000 series cars currently being built by Bombardier. In that project, a casting on the trucks was failing due to poor quality control. The part was made in China. If it was made pretty much anywhere else in the world, it would have been a non-issue but instead the story was leaked to the newspapers (bearing in mind that we also had a national election last year). No matter how tempting the 7000 series order may be to a carbuilder (nothing like a big order to keep your production line humming for several years), I wouldn't touch it with a ten foot pole as the political stakes are already too high.

Edited February 17, 2013 by Jace

[Densha]

I really understand what you are trying to say Jace, but I really would like to know how many of the orders AnsaldoBreda took in the last years went by without this sort of outcome. I honestly think that even though the politics may be wrong, AnsaldoBreda shouldn't take an order if they are sure they are not able to deliver it on time and/or according to specifications. I don't know of many orders they delivered on time either. My guess is they are taking too large risks.

Again, all manufacturers have built bad trains sometimes, but that's usually only with a small series of prototypes intended for testing purposes or either is solved in at least a few years (the latter is what I found about the SNCB class 18, but I may be wrong). AnsaldoBreda isn't, even if they would want to, not able to solve their defects.