Transport market characteristics

We work in a variety of different environments, and we have a wealth of experience of different transport markets and their characteristics.

Czech Republic

Population: 10.2 million

Responsibility for the procurement of road and rail public transport has been devolved to regional authorities, with funding centrally controlled.

Czechoslovakian Railways (CD) has adopted the EU directives in respect of splitting infrastructure from operations and, internally, has adopted a divisional structure to represent the different segments of the market. Competitive tendering of a limited number of regional services is underway.

The former state-owned regional bus companies have all been privatized for some years, and negotiated contracts leading to competitive tendering are in place.

Arriva's presence:
Arriva entered the Czech Republic in 2006 with the acquisition of Trancentrum Bus s.r.o,  we strengthened our position around Prague with the acquisitions of Bosak Bus s.r.o and Osnado Spol s.r.o in January and November 2007 respectively.

Denmark

Population: 5.4 million

The Danish bus market is regulated and largely operated by private companies. Funding comes from local authorities, which award service contracts through competitive tendering.
The rail sector is currently dominated by DSB, the Danish State Railways, but is becoming increasingly opened for tender opportunities.

Arriva's presence:
In 2007 Arriva acquired Veolia Scandinavia the second largest operator in the Danish bus market.  Arriva now has a market share of 60 per cent of bus services in Copenhagen and 50 per cent of regional services outside the capital. Our rail operations cover 15 per cent of the national rail network and we are the top-performing operator in the country.

Germany

Population: 82.3 million

The German transport market is the largest in Europe.

Although the bus sector is dominated by publicly owned companies, some Länder, or regional authorities, have announced programmes for the competitive tendering of bus services and some small to medium-sized public companies have been seeking partners or to dispose of their interests.

Competitive tendering has been a feature in respect of the provision of rail services for a number of years. However, less than 20 per cent of the services have been tendered to date and only a proportion of these have moved into the private sector. Whilst there are now a number of active private companies, the state-owned Deutsche Bahn (DB) still dominates the sector.

Arriva's presence:
Arriva entered the German rail market in April 2004 and the bus market in October 2005.

The group operates Sippel, which provides services in the Rhine-Main area, Verkehrsbetriebe Bils KG which operates in the Münsterland region and Neiszeverkehr in north-east Germany near the Polish border.

We have secured several rail contracts via our Prignitzer Eisenbahn Gruppe (PEG) and Regentalbahn operations. PEG provides rail services in the federal states of North Rhine-Westphalia, Berlin, Brandenburg and Mecklenberg-Western Pomerania, and Regentalbahn provides rail passenger and freight services in Bavaria, Thuringia, Saxony and cross-border services into the Czech Republic and Switzerland.

In 2007 we acquired a majority stake in bus and rail company Osthannoversche Eisenbahnen AG, based in Celle near Hannover in the north of Lower Saxony.

Italy

Population: 59.1 million

The Italian passenger transport market is the third largest in Europe. It is regulated, with both the bus and rail sectors moving rapidly into negotiated contracting.

In November 2004 a state law reintroduced the obligation to introduce market testing through competitive tendering by the end of the year. The deadline was later extended to 2006. It is expected now to be introduced during 2007. At the moment only four regions have awarded bus services with tenders so far. These are: Friuli Venezia, Giulia, Valle d'Aosta, Liguria, Lombardy.

The European Community Directive 91/440 was enacted into Italian law as part of the general transport plan in July 2000 and laid down the guidelines for the restructuring of the national rail system which emphasised the need to separate rail infrastructure management from transport operations. Operator certification remains a function of the ministry of infrastructure and transport.

Arriva's presence:
Arriva entered the Italian market in July 2002 when acquiring SAB Autoservizi SrI, a bus group operating in the Lombardy, Liguria and Friuli-Venezia Giulia regions of northern Italy. Arriva later acquired 60 per cent of Societa Autoservizi FVG SpA (SAF) in the Udine area of the Friuli-Venezia Giulia region, and in October 2005, acquired 80 per cent of the SADEM operations near Turin.

In January 2008, we increased our shareholding in Brescia-based SAIA Transporti to 100 per cent.  The initial shareholding was acquired as part of the purchase of the SAB group of companies in 2002.

Netherlands

Population: 16.4 million

The Dutch bus market is regulated, with local authorities awarding negotiated contracts of up to six years in length. The Dutch transport act of 2001stipulates that all bus transport must be awarded to contractors through competitive tendering process by 2009. This significant programme represents a good opportunity for Arriva Nederland to grow its business by building on its reputation for delivery and winning further franchises. Additionally, the privatisation of state-owned Connexxion is expected in 2007.

In the coming years the responsibility for regional rail will be transferred from the national government to the regional authorities. This is already the situation in the northern and eastern part of the country: Groningen, Friesland, Gelderland.

Arriva's presence:

Arriva Nederland operates rail services in the north of the country and won the contract to be sole operator of rail services for 15 years in the northern provinces of Friesland and Groningen. We have a 12-year bus and rail contract in the south of the country operating between Dordrecht and Geldermalsen.

Arriva is one of the two biggest private bus operators in the Netherlands. It operates 20 per cent of the regional bus services in the country, in the city and province of Groningen, the province of Drenthe, in Waterland and in the centre of the country near Rotterdam.

Poland

Population: 38.2 million

The Polish transport market is a vibrant and modernising free market economy for public services. Like many other European countries it is evolving and opening up, with an increasing use of tenders to introduce competition.

Arriva's presence:
In December 2007 Arriva and joint venture partners PCC Rail started operating passenger rail services in the Kujawsko-Pomorskie region in north-west Poland.

Arriva PCC Rail is the first private sector operated passenger rail contract of its type in Poland and further develops Arriva’s reputation for innovation in bringing private sector expertise to mainland European transport operations.

Portugal

Population: 10.6 million

The bus market is fragmented outside the main cities with long, rolling concessions initially of ten years but subsequently 5-year extensions. There is no competitive tendering and maximum fare levels are controlled by the central government. There are proposals to create new metropolitan authorities, which may lead to the introduction of competitive tendering for bus and rail services in the Lisbon and Porto metropolitan areas.

The state rail system is yet to be privatised but the infrastructure has already been separated from the regional operators. There is speculation regarding plans to privatise some key lines which will provide future opportunities for private operators.

Arriva's presence:
Arriva entered the market in 2000. We operate Transportes Sul do Tejo (TST), which provides bus and coach service in the commuter region south of Lisbon, and Arriva Portugal -Transportes LDA which provide bus services in North West Portugal. In 2006 we purchased 21.5 per cent of the Barraquiero Group, Portugal's leading transport operator, which has bus, tram and the country's only private rail operations and covers the area from Lisbon to the south.

Arriva acquired a further 10 per cent of Barraqueiro in January 2008 taking our holding to 31.5 per cent.

Spain

Population: 43.7 million

The bus market is fragmented outside the main cities with long, fixed concessions, which are now beginning to expire. There is a gradual move towards competitive tendering particularly in cities where the markets are growing.

The rail market is yet to open up to tendering. Historically the market has developed on a regional basis.

Arriva's presence:
Arriva entered the market in 1999. Our Arriva Noroeste operates bus services in Galicia in north-west Spain. We also operate bus services in northern and western Mallorca. In 2007 we acquired two Madrid-based bus companies, Esfera providing school contract and private hire bus services and coach operator Autocares Fray Escoba.

Sweden

Population: 9.1 million

The Swedish bus market is regulated and about 95 per cent of routes are tendered. Responsibility for the procurement and funding of bus transport rests with local authorities.

The government-owned rail operator SJ dominates the market; however with the devolution of responsibility for the procurement and provision of services to regional authorities, competitive tendering has now entered a new phase.

Arriva's presence:
Our Swedish buses operate predominantly around Helsingborg and Malmo. Arriva won entry into the Swedish rail market, with a nine-year contract to operate the Pågatåg regional train service in the Skåne region of southern Sweden from summer 2007.

UK

Population: 60.5 million

In the UK, the bus market in London is tendered out by the authority Transport for London. Buses in the rest of England, and Scotland and Wales operate in a deregulated market, with private - and some municipal - operators running the majority of services, and local authorities tendering additional services.

The British government awards franchises for the operation of train services. These franchises are awarded for set timescales to private operators through a bidding process. Infrastructure company Network Rail, a private company limited by guarantee and operating as a commercial business, owns and operates Britain’s rail infrastructure.

In Northern Ireland, transport is state owned and regulated by the Northern Ireland Assembly.

Arriva’s presence:
Arriva is one of the top three bus operators in the UK, and is one of London’s largest bus operators with nearly 20 per cent of the market. We operate CrossCountry, the UK's most extensive rail franchise, and virtually all trains services in Wales. In January 2008 we acquired coach and airside passenger transport operator Tellings Golden Miller Group.

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