According to the fourth Norton Rose "The Way Ahead" Transport survey - Where are you now?

A global survey of 1,000 plus respondents across rail, aviation and shipping

  • 88% of rail respondents deem government support for the provision of rail infrastructure "essential".
  • Improving the capacity on existing lines is regarded as the most urgent infrastructure need.
  • A new strategic focus is highlighted as the most significant change to rail businesses between 2010 and 2012, followed by increased financial constraint and technological changes.
  • 18% intend to draw on structured finance for the first time, 13% on private equity and 12% on bonds.
  • 52% regard technological developments as the most important development focus for the rail sector, followed by low maintenance costs and more efficient fuel consumption, each selected by 36% of respondents.

The call for government investment in rail infrastructure is growing, according to international legal practice Norton Rose's "The Way Ahead" Transport survey - Where are you now? Eighty-eight per cent of respondents from the global rail sector believe that government support for the provision of infrastructure in their sector is "essential".

In addition, 84 per cent believe that infrastructure investment is the most helpful form of government support, up from 71 per cent last year. Upgrading to improve the capacity on existing lines is ranked as the most urgent infrastructure need by the rail sector, by 45 per cent of respondents, more than double the 21 per cent who regard high speed lines as the rail sector's most urgent infrastructure need.

The survey suggests that while the rail sector is more optimistic than aviation or shipping, only 40 per cent believe that government investment in infrastructure will be sufficient over the next five years.

While aviation and shipping report that financial constraint is one of the most significant changes to their business since 2010, a new strategic focus was highlighted as the most significant change to rail respondents' businesses by 43 per cent, ahead of 40 per cent who highlighted increased cost, price and funding pressure and 38 per cent who highlighted technological improvement.

Over half (58 per cent) of rail respondents have sought to change their market position in terms of the market segment in which they operate, the range of products they offer, or their geographic focus. Half have changed the range of products and services they offer, 45 per cent have entered one or more new market segments and 45 per cent have entered new geographical markets.

The rail sector anticipates that the majority of its funding over the next two years will be in the form of government support. Despite this, there is evidence that the sector is drawing on new sources or methods of finance, of which structured finance is the most popular. Eighteen per cent are using, or considering using, structured finance, followed by private equity (13 per cent) and bond financing (12 per cent).

Technological developments remain key for the rail sector. Over half (52 per cent) regard technological developments as the most important development focus for the rail sector in the future, well ahead of more efficient fuel consumption and low maintenance costs, both of which were selected by 36 per cent of respondents.

Tom Johnson, Head of Rail, Norton Rose, commented:

"The rail sector has pursued a number of positive strategies in the wake of the global financial crisis, changing its market and geographical focus and focusing on technological developments. A new strategic focus is highlighted as one of the most significant changes to rail businesses since 2010."

"While government, shareholders and bank debt remain the pre-eminent sources of funding there are early signs that the rail sector is also looking to diversify into areas such as structured finance and private equity."

"Despite this, the rail sector is heavily reliant on government support, both for funding and for infrastructure investment and calls for infrastructure investment are becoming louder, particularly with regard to increasing capacity."

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