Signalling Business Unit

The orders acquired in the year 2009 came to EUR 1,243,016 thousand and reflect an increase of EUR 279,447 thousand from the same period of the prior year (EUR 963,569 thousand).

The order backlog at 31 December 2009 came to EUR 1,980,191 thousand (EUR 1,755,858 thousand less transactions with the Transportation Solutions Business Unit) as compared with EUR 1,526,383 thousand at 31 December 2008.

The most significant events of the year 2009 referring to the Signalling Business Unit are outlined below.

ANSALDO STS - ITALY REGION

The value of acquisitions in 2009 amounted to EUR 762.3 million (EUR 480.5 million in 2008), a strong growth compared with the acquisitions of the previous years.

This amount is the result of the positive results achieved in the foreign market consistently with the Group’s strategic objectives of geographic diversification.

The achievement of this objective is witnessed by the signing of a contract with the Libyan railways for EUR 541 million, the most important contract ever taken by Ansaldo STS, which confirms the growing trend of orders in markets other than the domestic one.

Also it is worth noting the operating start of the project for the testing in Russia of the ITARUS ATC new railway signalling system, based on ERTMS solutions, where Ansaldo STS is a worldwide leader. It is clear how strategically important may be a positive positioning of our Group in a market with great potential as the Russian market.

Domestic market

In the last three years the targets of the main national customer RFI focused on the completion of the high–speed, high-capacity (HS/HC) lines linking Turin, Milan, Bologna, Florence, Rome and Naples and the programme for the rail traffic safety through the rail traffic management system (SCMT) and secondary command and control system (SSC).

In the domestic market, the Group collected orders for a total EUR 179.9 million (EUR 174.2 million in 2008). Of these, the main orders relate to:

  • orders from RFI for systems and changes to the ACC contracts in the amount of EUR 22.8 million;

  • orders for new CTCs, SCCs and Security in the amount of EUR 19.8 million;

  • orders from the HS Consortium Saturno for a total amount of EUR 44.6 million;

  • sundry orders for regional railways for a total amount of EUR 20.4 million;

  • orders for Service and Upgrade activities in the amount of EUR 38.5 million.

Foreign market

Outside of Italy, the railway segment can be said to be markedly oriented to the adoption of the ERTMS solution, whereas the metro segment manly required CBTC solutions sometimes with driverless alternatives.

In Libya Ansaldo STS will supply a Signalling system (Interlocking, CTC, ERTMS, Level 1 and Level 2), Telecommunications, Security and Power Supply for the Ras Ajdir - Sirt (650 km) and Al Hishah - Sabha (800 km) lines. The negotiation with ZST (a subsidiary of RZD) is under way for the supply of the signalling, automation and security system for the Sirth - Benghazi (550 Km) line in Libya, where the Russian Railways have already signed a contract for the turnkey delivery of the entire line.

The business is continuing in the German market, where an order for Level 2 ERTMS onboard equipment was received for Siemens high-speed new-generation trains (Velaro D) of the value of EUR 16.8 million. This is particularly relevant because it allows Ansaldo STS to be the first company in Germany holding contracts for the entire ERTMS range (wayside and onboard). A contract was also signed for the supply of spare parts in relation with the above order.

In Russia the contract between Ansaldo STS and NIIAS (a subsidiary of RZD) for the implementation of the pilot project on the above-mentioned ITARUS ATC railway signalling system.

In the foreign market, the Group acquired orders for a total EUR 574.2 million (EUR 311.1 million in 2008), including:

  • the above-said order from the Libyan railways for the signalling, telecommunications, security and power supply for a total amount of EUR 541 million;

  • the order from the Russian railways (RZD through NIIAS) for the implementation of the pilot project of the new ITARUS ATC railway signalling system in Sochi for EUR 7.4 million;

  • the order of ETCS onboard equipment from Siemens to ASTS Deutschland for Velaro D trains in the amount of EUR 17 million.

The order backlog at 31 December 2009 came to EUR 1,269.4 million, including transactions with the Transportation Solutions Business Unit, as compared with EUR 860.7 million at 31 December 2008.

ANSALDO STS - FRANCE REGION

Ansaldo STS France acquired orders in the amount of EUR 155.6 million, of which 25% in France; these mainly relate to: “Maintenance HSL Madrid-Llerida” (EUR 31.3 million), “Maintenance RATP” (EUR 6.6 million), “RBC France HSL East Europe” (EUR 3 million), “Other Components / Service & Maintenance” (EUR 35 million).

The offers presented to the three tendering consortia (Bouygues, Eiffage and Vinci) are being evaluated for the new Tours – Bordeaux high speed line. The decision, which was expected by the end of 2009, was postponed to 2010 for the great size of the work and the need to find sufficient financial coverage.

A proposal was presented for the BPL HS project (Brittany – Pays de la Loire) and a decision is expected for the end of 2010/start of 2011.

Always in this market, RFF launched a pre-study for the application of a pilot line of the ERTMS Regional concept to be implemented by ASTS and its three main competitors in 2010.

Within the other markets of this region, the Ansaldo STS Group is leader in the ETCS installations in the United Kingdom (Cambrian pilot line) and Sweden (ESTER master agreement); to ASTS this ensures a leadership position in the ETCS market to be developed over the next few years in Northern Europe (future pilot line in Norway, ETCS total migration programme in Denmark in the 2010 – 2020 period).

In Spain interesting opportunities were identified for the urban transportation systems and the tram systems, where tenders are for separate supply lots rather than for “turnkey” contracts.

HS programmes are slowing down mainly due to ADIF’s need for structuring innovative forms of financial coverage (Public Private Partnership). However, tenders to install ETCS L2 on the Ourense-Santiago and the Utrera-Jerez lines were launched and bids will be tendered in February 2010.

In Portugal, REFER and RAVE are strengthening their plans for installations giving priority to a project for the pilot line (Cascais) and a new HS line which connects the main cities to the Spanish border.

In Asia, the ongoing strategic alliance in Korea ensures with continuity new orders; several opportunities are also being followed which are expected to mature in the medium-term in the high-speed lines and inter-urban transport.

In China the first interlocking of the SEI family adapted to the CTCS-2 Chinese standard (Shitai project) successfully entered operations.

The orders acquired at 31 December 2009 came to EUR 183.4 million (EUR 219 million at the end of 2008). At the end of 2009 order backlog was EUR 268.7 million, while it was EUR 274 million at 31 December 2008.

 

ANSALDO STS - AMERICAS REGION

Cargo Transport

In 2009 the cargo transport segment was affected by a general slowdown in productive activity: cargo traffic fell by 16.1% compared with 2008, an annual reduction of more than 2.6 million carriages.

Railway cargo transportation still presents interesting development perspectives in the long-term, as is witnessed by the acquisition of Burlington Northern Santa Fe Railway from the Berkshire Hathaway Group owned by Warren Buffett in November 2009, for an amount of USD 34,000 million.

The Berkshire Hathaway Group and its leader Warren Buffet are known for the peculiar attention paid to the valuation of profitability of the investments made. In this context, the acquisition of Burlington Northern witnesses the growth potentials of this sector.

In this scenario, the advantages offered by railway transport in terms of control of the climatic change, reduction of energy consumption and decrease in truck traffic will be a competitive advantage.

Mass Transit

With regard to the mass transit segment, an increase is expected in the investments for implementing safety procedures for the present transport networks, also as a result of the numerous accidents of the last few years. To that regard, in September 2009 the National Transportation Safety Board (NTSB) issued nine safety recommendations (six of which are urgent) regarding the safety of train speed control systems.

The NTSB also recommended to the Federal Transit Administration (FTA) and the Federal Railroad Administration (FRA) to do their best so that the urban transport network operators review their truck circuits and cooperate with their providers of signalling systems in order to eliminate risky situations and introduce adequate control systems.

During 2009 Ansaldo STS USA Inc. obtained significant orders in the Mass Transit segment by the Metropolitan Companies of Washington, New York, New Haven and Pittsburgh, which more than offset lower orders in components. Some of the first PTC orders should be noted. They give hope to a marked increase in the segment in 2010.

High-speed railways

With regard to the development prospects for high-speed network in the United States, in addition to the amounts set aside by as envisaged in the American Recovery and Reinvestment Act (ARRA), for a total amount of USD 8 billion, other measures were taken during the year as proof that the programme is receiving growing attention by the State and federal authorities.

In this context, the Chamber of Deputies approved the Consolidated Appropriations Act with sums accrued to be used in the Transportation segment for fiscal year 2010. In addition to USD 2.5 billion for High Speed railways, this Act includes USD 600 million for the National Infrastructure Investments Program.

With regard to the HS line in Florida, USD 2.6 billion is expected to be appropriated for the line linking Tampa to Orlando and USD 30 million to study its extension to Miami.

In Brazil the market positioning of ASTS USA is improving and interesting commercial development are expected in the future. This market as a whole and in particular in the mass transit segment reveals a growth trend that is also determined by government loans.

During the year, a first important order was acquired for onboard equipment for the Sao Paolo Metro.

The orders acquired at 31 December 2009 came to EUR 197.8 million, with a USD increase of 55% compared with 31 December 2008 (EUR 120.7 million). At the end of 2009 order backlog was EUR 362.8 million, while it was EUR 319 million at the end of 2008.

ANSALDO STS - ASIA PACIFIC REGION

Although the effects of the world financial crisis adversely affected the trading of raw materials and therefore on the investment programmes of the major customers in the area, represented by mining companies, the final results of the orders for 2009 are to be considered satisfactory.

In this region as well, the approval of measures to enhance investments in the infrastructures for passenger transportation might bring during the second half of 2010 new actions aimed at increasing the level of security and the services offered. The federal government also funded works for level crossings in every State and will appropriate further funds in 2011 for these projects.

In Australia business perspectives continue to be interesting. Ansaldo STS in the next three years is expecting further orders by ARTC Alliance, which was recently extended and relaunched as AANSCA (ARTC Ansaldo STS Network Control Systems Alliance), mining customers (Rio Tinto and FMG) and Queensland Rail.

In India the market is essentially stable. Orders for the alternative routes to the KFW project and additional appropriations to the programme for the renewal of the stations are expected to come in the year 2010, and the approval for the development plan of the Indian Railways is also expected. The plan should also include the upgrade of some 500 interlocking systems and protect around 1800 kms of the line with signal repetitions systems (on-board and wayside).

The orders acquired at 31 December 2009 in Signalling came to EUR 166 million; at 31 December 2008 orders acquired amounted to EUR 151.6 million. At the same date the order backlog amounted to EUR 135.6 million from EUR 83 million at 31 December 2008.