- Over 80% of global rail sector respondents view current market conditions as positive for their sector
- Half believe new opportunities are emerging for rail but a lack of available finance, inadequate infrastructure and a lack of suitability qualified employees are identified as key challenges
- Just 14% of respondents are satisfied with their current access to funding, behind aviation (16%) and shipping (21%)
- Investment in infrastructure would benefit the rail sector more than any other investment opportunity
- The introduction of new high speed and high capacity assets is expected to create new opportunities for the entire rail sector
- Three quarters expect fares and freights to rise and 85% expect passenger numbers and freight volumes to increase
- Western Europe offers the best opportunity for investment, followed by North America and the Middle East and North Africa
According to global legal practice Norton Rose Fulbright’s fifth “The Way Ahead” Transport survey optimism is growing in the rail sector and new opportunities are emerging but a lack of infrastructure investment, available funding and suitably qualified people are identified as key challenges for the sector.
The survey report, entitled Where Next? reveals that 81% of respondents from the rail sector believe that current market conditions are positive for their sector and half (50%) believe new opportunities are emerging. However, just 14% are satisfied with their current access to funding. Over a quarter (27%) view a lack of available finance as the most significant challenge to the future efficiency of the sector, together with a further 27% who believe inadequate infrastructure is the greatest future challenge for rail sector.
As a result, the rail sector favours additional government support to a far greater extent than the aviation and shipping sectors. Almost a fifth (19%) believe the most effective way of making funding available would be to offer government guarantees, followed by 13% in favour of government supported soft loans. Over half (53%) believe government investment in infrastructure would be the most helpful form of state support.
The rail sector is enthusiastic about new high capacity and high speed assets, with 42% anticipating that their introduction would open the way for new opportunities for the entire rail sector. Just 6% fear they will create overcapacity, compared with 30% of the shipping sector and 11% of the aviation sector.
An increase in fares and freights, and in passenger numbers and freight volumes is also expected, by 75% and 85% of respondents respectively. By comparison, just 53% expect the number of routes and services offered to increase.
While inadequate infrastructure is highlighted as the greatest challenge to the future efficiency of operations in the rail sector, by 27% of respondents, 21% believe the greatest challenge will be a lack of suitably qualified people. Despite this, just 8% believe investment in their workforce is the investment opportunity most advantageous to their business.
Western Europe is seen as the market offering the greatest prospects for investment, by 19% of respondents, followed by North America (13%) and the Middle East and North Africa (11%).
Tom Johnson, head of rail, Norton Rose Fulbright; commented:
“Calls for greater investment in rail infrastructure is an ongoing theme although some have expressed concerns over the availability of finance, together with fears that the rail sector may not be able to recruit sufficiently skilled employees.
“The sector is enthusiastic about the introduction of new high speed and high capacity assets, and with passenger numbers and freight volumes expected to rise there is a real case to be made for their introduction. Access to adequate levels of finance will be needed to support the growth of the rail sector and ensure that it can capitalise on the new opportunities emerging.”