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
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
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
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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