Rail Corridor IV SOPT Projects Rebuilding for 160

Rail Corridor IV: SOP-T Projects Rebuilding for 160 km/h Brief Overview of JASPERS Technical Assistance to PMUs of CFR JASPERS Framework Consultant ‘Arup’ Richard H Brown CEng FICE (UK) Team Leader, Practical Consultations and On-the Spot Support to PMUs of CFR, Romania Oradea, 15 November 2013

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JASPERS Technical Assistance (TA) to CFR Our Role: Practical Consultations and On-the-Spot Support to PMUs of CFR. JASPERS Project Team: Team Leader and Site Engineer (+ Backup). Team Leader is embedded within HQ CFR. Site Engineer is embedded on Site. We are: Advisors, Mentors, Influencers, Catalysts and sometimes Change Agents. The main objective of our Technical Assistance: To assist CFR (particularly the PMUs of CFR) in structuring efficient internal working procedures thus contributing to improved implementation of SOP-T projects and strengthening institutional capacities of CFR. Envisaged Duration: April 2013 – April 2014. 3

Team Focus Working Alongside: § CFR FIDIC Engineer and Supervision Teams - training & mentoring (pending award of external supervision contracts). § PMUs & DDGEP - reviewing & mentoring within project implementation (feasibility through design & programme to construction) - especially identification of gaps/deficiencies, need for PMU restructuring and improvement & standardisation of PMU services. Key Output: § Development of ‘Practical Guidelines for Project Implementation’ (Design through Construction), for general use on SOP-T Projects throughout CFR. 4

Corridor IV, Sighisoara - Simeria: The Main Focus of TA Almost a total rebuild of rail infrastructure (171 route km) Five Works Contracts - four awarded, one contested One Signalling/ERTMS Contract - contested (Alstom v Thales) One Supervision Contract (FIDIC) - contested Works and Signalling: Linked Physically Unlinked Contractually Total Value of Contracts: € 1. 00 billion (works) + € 0. 12 billion (signalling) Works Contracts: 2. 5 - 3. 0 year programmes FIDIC ‘Red Book’ for Works Contracts FIDIC ‘Yellow Book’ for Signalling Contract 5

Current Statistics Contractor JV Amount Contracted Contract Period Elapsed Physical Progress Planned as at Actual as 31. 10. 13 at 31. 10. 13 Time Overruns (estimates) Current Eligible VOs (unpaid) Cost Overruns Sighisoara - Atel FCC 1 RON 873 M 57% 67% 21% 1. 5 years € 6 M Very likely Atel - Micasasa FCC 2 RON 747 M 46% 25%* 14% 1. 0 years € 3 M Very likely Micasasa - Coslariu - Vintu de Jos AKTOR RON 722 M 50% 53% 27% 1. 0 years € 4 M Very likely PIZZAROTTI RON 767 M 75% 49%* 21% 1. 5 years € 2 M Very likely Vintu de Jos - Simeria Contested / Retendered 0% Very late Signalling / ERTMS Contested 0% Very late Works Supervision Contested / Retendered 0% Very late RON 500 M (estimate) 6

Main Issues § § § Lack of Equitable Commitment between MT and CFR at Project Initiation (a major inter-institutional failure) Failure to Consider Implementation Options and Associated Risks & Contingencies Failure to Acquire Land Ahead of Commencement of Contracts Failure to Conduct Adequate Geotechnical Site Investigations Failure to Identify Major Elements of Work Failed Procurement of One Works Contract Failed Procurement of Signalling/ERTMS Contract Failed Procurement of Works Supervision Contract Main Designer Unpaid Eligible VOs / Additional Works Blocked Capacity Deficits within CFR: Reactive Corporate Leadership Departmental Entrenchment ‘Boxed’ thinking throughout EPS ‘Lite’ PMUs: Staffing Ratios, Profiles (qualifications & experiences), Motivation (salaries) Inexperience in FIDIC Supervision Potentially, No Signalling for the Foreseeable Future after Tracks are Switched** 7

The Response What Are We (TA) Doing? § § § § Monitoring Activities and Procedures on Site and at CFR HQ Training & Mentoring of CFR FIDIC Supervision Staff Advising on Proposed Restructuring of Corridor IV PMUs Developing the ‘Core Team’ Concept (through RWG) Facilitating Topical Workshops Preparing ‘Practical Guidelines’ Short-Term Expert Advice on Key Ad-Hoc Issues (FIDIC & Tunnel Design) Reviewing Implementation Plans for Simeria – Km 614 What Can MA and CFR Do? § § § Work proactively together to address all the issues - See through the ‘Barriers’, not hide behind them. Form a joint creative (‘no blame’) Working Group. Ask JASPERS to help! Assign appropriate staff to PMUs (numbers of positions) Make use of ‘financial stimulation’ SOP-T funds already allocated under each project budget to enhance the conditions for attracting, maintaining and motivating good quality staff 8

Transferring Key Lessons Learned to ‘Simeria - Km 614’ Item Sighisoara - Simeria – Km 614 1. Track Capacity Overprovision of recess loops and crossovers: Too late to re-specify. Overprovision of recess loops and crossovers: These could be re-specified but might compound delays in project commencement. 2. Project ‘Commitment’ Absent. Pressure from MT to curtail project preparation was intense with adverse consequences for Implementation. No agreed arrangements for adequate project staffing. MT and CFR only interested in ‘outputs’ not ‘outcomes’. Appears to be absent. No guarantees that all aspects of project preparation will be complete prior to award of construction contracts. No agreed arrangements for adequate project staffing. MT and CFR only interested in ‘outputs’ not ‘outcomes’. 3. Project Risks Either not assessed or inadequately assessed. Options and contingencies not identified. Huge downstream consequences. Some improvements but in covering for previous inadequacies rather than analysing key options and making optimal selections. 4. Project Procurement Separate contracts for civil works and signalling works and then subsequent delays in awarding the signalling contract have led to an almost unworkable train timetable. Each contractor on each section of route will take full responsibility for civil works and signalling works – this should insure against misalignment in completion. It will however, require superior project management by CFR to oversee highly complex technical interfaces. 9

Conclusion Parting Thoughts: Upgrading an existing railway is more complex and carries heavier risks than building anew. Attempting to do this on a large scale without an alternative operational plan is asking for trouble. Upgrading Simeria – Km 614 the same way (and now potentially at the same time) will just compound problems – a snowballing effect may eventuate. Recommendations: Actions are urgently needed to build/strengthen CFR’s institutional capacities to manage SOP-T projects, with motivation through eligible funds - leverage from the EC could be very helpful. MA and CFR should undertake a proper assessment of options on all future projects (including Simeria – Km 614) with the aim of developing plans that mitigate principal risks both to the projects and to CFR. 10

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