On 25 September 2015, 193 countries committed themselves to achieving the 17 UN Sustainable Development Goals (SDGs) by 2030. These SDGs are based on the values of responsibility, equality, sustainability and resilience, among others. Land freight transport could play a key role in achieving these objectives, since this is a sector that contributes to employment and the economy, connecting and enabling world trade, exchange between consumers and producers and is closely linked to the economic development of countries.

The way in which this transport is developed is another key factor in achieving the SDGs, because transport services themselves, and the necessary infrastructure, can be directed towards more energy-efficient, lower-carbon emissions, more reliable vehicles and means of transport, and accessible and resilient infrastructure.

Within the framework of the European Union (EU) and in the railway sector, one example of measures and actions in alignment to help achieve the SDGs is the implementation of the Trans-European Transport Network (TEN-T). Its roll-out involves planning interoperable infrastructures that will eliminate existing inter-country connectivity problems arising from differences in technical specifications in each country, such as track gauge.

Specifically, Regulation 1315/2013 requires that infrastructure be electrified, have a standard track gauge of 1,435 mm, and allow trains with a minimum axle load of 22.5 tonnes, as technical requirements on the TEN-T Core Rail Network by 2030. At the same time, in the field of road transport, the EU recently approved a reduction in CO₂ emissions from lorries, which means that beginning in 2025, new lorries will be required to emit an average of 15% less than in 2018, with a reduction of up to 30% starting in 2030.

According to the latest available figures from the Observatory for Transport and Logistics of Spain (OTLE), the land freight transport market has a significant presence, accounting for 75% of the freight transported in and out of the country in 2018. The share in terms of tonnes of the land mode varies significantly depending on the area in question; in the case of international journeys, it drops to 20%, with maritime transport playing a more significant role.

In Spain, 96% of tonnes of freight are transported by road, the predominant mode of transport, as opposed to rail, which in 2018 accounted for less than 2% of freight and 4.3% of net tonne-kilometres for all modes of transport. However, rail freight transport is almost five times more energy efficient than road, in regard to the energy consumed with each tonne-km transported, according to data from OTLE.

In Spain, 96% of tonnes of freight are transported by road, the predominant mode compared to rail, which moved less than 2% in 2018

The share of the rail transport mode in land freight transport in Spain has been decreasing since the second half of the previous century, when the conditions of the means of transport and road infrastructures improved significantly, leading to a loss of market share for railways that has continued until today. Similar declines, albeit to a more limited extent, have also occurred in neighbouring countries. In 1991, the tonnes-km of rail freight accounted for 10.7% of total demand, dropping to 6.8% in 2001.

Given the current situation of the railways, measures are being taken in terms of infrastructure and the updating of regulations, in line with those issued by the EU, as part of a global effort to promote efficient and sustainable means of transport. These include the construction of the Mediterranean Corridor, improvements to the conventional network and the development of a new gauge changeover system.

The Mediterranean Corridor is part of the trans-European corridor between Algeciras and Stockholm. It is 3,500 km long, covers 54% of the population of the EU and 66% of the GDP. It will enable the movement of people and freight by rail, generating opportunities and economic growth. In Spain, it runs through the Regions of Catalonia, Valencia, Murcia and Andalusia, connecting with European railway lines, including high-speed lines, and with the main Spanish ports on the Mediterranean arc, making it one of the most important railway routes on an economic and commercial level. The new infrastructure consists of 14 sections, 5 of which, the ones closest to the French border, have been completed, with the remainder under construction or currently being planned. It is scheduled to be completed in 2025, although it could run beyond that date.

When the high-speed network is put into service, passenger traffic will be transferred from the Iberian-gauge conventional network to the standard-gauge HS network, which will create free lines that can be used by freight trains without having to be shared with passenger trains. Works are being carried out to improve freight transport, including new electrified sections, such as the Bobadilla-Algeciras section, which is within the actions of the Mediterranean Corridor, and the Salamanca-Fuentes de Oñoro section on the Portuguese border, which forms part of the Atlantic Corridor, and which is expected to be completed in 2021 to connect the ports on the Atlantic coast with the centre of Europe.

One of the factors most often used to justify the limited use of rail for international trade has been the difference in gauge between mainland Spain and the European network. In an attempt to address this problem, various procedures have been applied, from the transshipment of freight to the changing of axles and bogies of wagons and carriages, along with a competition in 1966 to have rolling stock that would automatically change gauge. The finalists were the systems from Seville-based OGI and Vevey in Switzerland, with the latter chosen as the winner but later rejected for failing to meet the technical requirements.

In 2011 and 2013, the decision was made to develop the OGI system, a mandate that has been carried out by the companies Adif, Azvi and Tria. Following homologation of the gauge changeover system in 2019, the State Railway Safety Agency authorised the entry into service of the MMC3 container wagons and LTF vehicle carriers. In principle, the availability of the new wagons should increase rail transport, although this type of material will be limited to specific relations, since due to its specific characteristics it will have to make mainly round trips outside the Iberian Peninsula.

This major railway line is a project promoted by the Bolivian government. The plan is to cross the South American continent from east to west (Brazil, Bolivia, Peru), connecting the three countries and possibly adding branches to Paraguay and Argentina. The project involves building a total of approximately 4,700 kilometres of a freight and passenger line in order to establish a high-capacity transport route between the Pacific and Atlantic.

To analyse the feasibility of the project, the Spanish engineering company Ineco, in consortium with Incosa, carried out a feasibility study for Peru’s Ministry of Transport in 2016 and 2017. The work, which focused on Peruvian territory, included analysis of possible route options and optimum technical and financial solutions; examination of freight demand forecasts until 2055; assessment of Bolivia’s infrastructure situation; studies of the compatibility of the different existing track gauges; and calculation of works budget distribution. The analysis concluded with a social assessment of the project and its feasibility.

This is a large-scale project whose profitability depends on freight and passenger demand originating in Bolivia and, especially, Brazil

Analysis of options

In order to define the best route, the consortium carried out a study of options on three corridors: two departing from the Desaguadero border post south of Lake Titicaca between Peru and Bolivia, and a third from a location proposed in the Bolivian government’s project known as Milestone 4, located southeast of the Desaguadero border post.

The three routes would reach ports on Peru’s Pacific coast: option 1 (originating at Milestone 4) and 2 (originating in Desaguadero), measuring 406.6 and 458.7 kilometres in length respectively, would join in the city of Moquegua into a common branch that would terminate at the port of Ilo; option 3 (originating in Desaguadero) would be the most extensive route, measuring 633.4 kilometres in length, 194 kilometres of which already exist and 439 kilometres which would need to be built. The latter would skirt Lake Titicaca, pass through the cities of Puno, Juliaca and Arequipa and terminate at the port of Matarani.

In all three options, the railway would need to negotiate considerably uneven terrain. The border between Peru and Bolivia is located at an altitude of 4,000 metres, which means that the railway would be required to wind between mountains and highlands to descend to a port on the coast. The basic geometric conditions of the project call for minimum radii of 250 metres and maximum slopes of 2.5%, in addition to the need to minimise the number of bridges, tunnels and earthworks.

In terms of social benefits, the study assessed savings on the operation of freight diverted from the roads; freight and passenger traffic times; environmental benefits; and reduced accident rates

Demand study

An important part of establishing the feasibility of the Bioceanic Railway Corridor was a demand study to calculate freight volumes in Peruvian territory for all of the route options and their projections for the time horizon under assessment.

The time horizons of the CFBC project to which the study worked were 2025 for entry into operation, 2055 as the end of the maturity period and 2075 as the final time horizon.

In order to determine future demand for the Railway Corridor, a transport model was drawn up using spatial referencing (zoning) to relate the network (supply) with mobility data (demand). It was a macro transport model that enabled prediction of the layout of an origin-destination matrix (demand) across different transport mode networks (supply).

To create this model, Ineco used TransCAD, a powerful transport planning software that uses aspects such as socio-economic variables, the general characterisation of the infrastructure and road and railway demand as baseline information. In addition, field work was also required to collect additional data to calibrate the supply network entered and the demand in the final origin-destination matrices together with the Bolivian review of the transport model.

Demand scenarios were simulated for three time horizons: 2025, entry into operation; 2050, intermediate year; and 2075, the project’s final time horizon. And the three supply scenarios for the three route options.

As a result of this model, the CBFC’s demand corresponding to the area of direct influence was estimated as follows:

• Internal Peru: representing flows captured by the line between internal areas within Peruvian territory.
• Bolivia-Desaguadero: representing flows captured by the line between internal areas within Peruvian territory and Bolivia.

Track gauges

The Peruvian rail network has standard gauge (UIC), except on the Cuzco branch to Aguas Calientes (Machu Picchu), which has metric gauge, meaning that any new railway line built in Peru must have standard gauge. Traffic on this gauge also has more transport capacity than on metric gauge.

For its part, the CFBC in Bolivia would have metric gauge, which would require trains to change gauge at the border with Peru. To solve the problem of gauge difference between the two rail networks, 3 options were analysed for the Peruvian section of the CFBC: metric gauge, standard gauge and mixed gauge. A set of indicators was considered such as, among others, compliance with the terms of reference, transport capacity, rolling stock requirements, network effect, benefits obtained by Peru and possible logistics activities in order to identify the possible advantages and disadvantages of the different gauge options.

Analysis showed that the standard gauge option would be the most beneficial for Peru.

To make decisions regarding the different CFBC options, an analytic hierarchy process (AHP) was used in order to select seven criteria: construction, environmental impact, economic aspects, social improvement services, concessionaires, operations and ports

Social assessment of the project: cost and benefit

In the study carried out by the consortium, the parameters and values applied to the evaluations for quantification of costs and benefits were those indicated by the methodology defined by the National System of Public Investment (SNIP), with the following concepts assessed:

• Infrastructure conservation costs.
• Variable costs of freight train operation (fuel consumption).
• Variable costs of passenger train operation (fuel consumption).
• Rolling stock maintenance costs.
• Fixed costs of train operation (personnel costs and general expenses).

In terms of social benefits, the study assessed savings in freight vehicle operation diverted from the roads; time savings for freight and passenger traffic; and the benefits of reduced accidents (material losses and loss of human lives and injuries) and environmental benefits (noise, atmospheric pollution, climate change, nature and landscape, loss of biodiversity, soil and water pollution).

The project has negative NPV social indicators because it only considers Bolivian freight in its analysis. In addition, IRR social indicators are below investor expectations. For the project to be socially profitable, the railway must be assessed taking the Bolivian and Brazilian freight that the railway could potentially use into account.

Multi-criteria analysis

To make decisions regarding the different CFBC options, an analytic hierarchy process (AHP) was used. This is a system used in large infrastructure projects in Peru which is acknowledged and valued for the multiple benefits it provides in the analysis of complex problems involving multiple variables.

For the analysis, seven criteria were selected –construction, environmental impact, economic aspects, social improvement services, concessionaires, operations and ports– and each one included a set of sub-criteria that were analysed for the three proposed options. The AHP system uses a scale of 1 to 9 to rate the relative preferences of the two elements to be compared. This method is based on the comparison of all of the options in a paired way for each of the sub-criteria selected.

Once the summarised values of the sub-criteria and criteria had been acquired, they were multiplied to obtain the weight of each of the sub-criteria. With these weights and summarised values of the comparison of the options, the matrices were multiplied to obtain the overall value for each one of the options.

The main conclusion of the study was that this is a large-scale project whose profitability depends on freight and passenger demand originating in Bolivia and especially in bordering countries, whose rail networks will need to upgrade their infrastructure and rolling stock, and, in the case of Bolivia, also complete the merging of its two railway sectors.

Everything in Brazil is enormous: its territory, the fifth largest on the planet; the largest hydrographical basin –the Amazon River and its thousands of tributaries–
covering half of the country; and its economy, the ninth most powerful in the world.

It is the world’s leading producer of coffee and sugar cane, the fourth largest of wood and one of the largest soybean producers, which attracts numerous multinational companies from the agri-food and biofuels industries; the agricultural sector represents just 5% of GDP, but it accounts for 40% of exports. Brazil also has a powerful industrial sector that contributes a quarter of GDP. It produces oil, aluminium and coal, and its textile, aeronautics, pharmaceutical, automotive, steel and chemical industries are also very important.

All of these goods travel through a network of 1.5 million kilometres of roads, 29,000 kilometres of railways, 32 public ports and 128 private ports, more than 4,000 airports and aerodromes and a network of 28,400 kilometres of waterways , including cabotage (coastal navigation) routes.

The federal government’s objective is to plan the considerable investment required by this immense transport network as effectively as possible in order to reduce logistics costs and thus increase the country’s competitiveness. To this end, it has launched the National Transport and Logistics Observatory (ONTL) through the public entity EPL (Empresa de Planejamento e Logistica), part of the Ministry of Infrastructure of Brazil, with which Ineco has collaborated.

Thanks to the ONTL, planners –and the general public– can consult the website www.ontl.epl.gov.br/index.php at any time for invaluable information to facilitate the decision-making process when it comes to optimising investment in infrastructure. For example, if data indicates that agricultural production, a type of large volume freight, is increasing, how can the waterway and port network be strengthened to transport it more cheaply and sustainably? And when improving the road network, in which regions has the demand for transport increased the most? How does the evolution of the country’s economy influence logistics costs?

These are just some examples of the usefulness of a transport observatory, an entity that more and more countries, including Spain, are creating, and which also collects very useful data provided by satellite tracking systems on the deforestation of the Amazon rainforest, information on fuel prices or the production of all kinds of goods, freight and passenger movements, tariffs and freight costs behaviour, average transport costs, macroeconomic indicators, etc. All of this data is provided by both large companies in the country and the different departments and public bodies of federal and state government that participate in the observatory, and is then processed and organised for easy consultation on the website.

The ONTL is the result of cooperation between the governments of Spain and Brazil, which have maintained close economic relations since the 1990s, with strong investment flows between both countries. Collaboration on transport infrastructure has crystallised in the signing of multiple agreements since 2012. As a result, in 2014, Ineco carried out a study to calculate transport costs on Brazil’s waterways. With the ONTL, Ineco transmits the knowledge it has
accumulated since 2013 in the Observatory that it designed and runs for the Spain’s Ministry of Public Works.

The Brazilian observatory gathers data from more than 50 sources of information supplied by numerous agents related to infrastructure, operations, security, financing and other key aspects of the Brazilian transport and logistics system: airport authorities and concessionaires, ports and roads, ministries and governmental entities, the police, merchant marine, sectoral associations and large public and private companies that represent the principal industrial sectors (oil, aeronautics, mining, automotive, etc.). All of these sources generate valuable knowledge that is disseminated in work sessions, specialised workshops and seminars, data panels, an annual newsletter, etc. and is collected on the website for consultation.

As in the case of the Spanish observatory, Ineco designed the information collection and processing system and the database and website, which is open to both sector agents and the general public. It has also developed a set of indicators which serve to harmonise data from different sources and facilitate the analysis of information and its dissemination.

It all started with an exceptional problem on a recently opened section of highway, in a mountainous area of Galicia. The very few 4 kilometres of the highway A-8 running through the Alto de O Fiouco (Mondeñedo, Lugo), has become a serious headache for its users, technicians and managers: the stubborn and thick fog, and at times, the strong wind which affects the highest passage of the highway (nearly 700 metres in height) cause constant traffic closures, without the various methods installed, which are effective for the rest of the roads, being able to resolve the effects of such controversial meteorology.

Finally, the Ministry of Public Works, with the support of Ineco, decided in 2015 to begin the search for alternative solutions to those currently existing in the market, through an innovative process of recruitment, the Public Procurement of Innovation (CPI, for its Spanish acronym). The aim was to develop a system of protection against the fog which would complement the measures that have already been installed, which practically cover the current state of the art in management and operation of roads (high reflectance signing, variable message panels, visibilemeters, fixed fog marker posts, section radar, etc.).

The main innovation of the process involves the participating companies proposing and developing new technological solutions, supported by the Public Administration, who defines the problem that needs resolving, establishes the validation criteria and functional specifications of the possible solutions and shares with the companies, in some of the more complex cases, the risks and benefits of R&D.

The new philosophy is: if it does not exist in the market, i encourage it to be researched and for innovative solutions to be proposed

Other cases of research of innovative solutions have emerged in the port of Málaga, the Galician health service (SERGAS) or the Hospital of Córdoba. Almost all of the goods and services sectors need to retrain with the improvements that contribute new technologies.

The established method for finding solutions to these unsatisfied demands is revolutionising the current administrative culture: the usual requirements (price, minimal risk) are replaced with a support policy for the private innovation through the commission of developing solutions which don’t exist, boosting the R&D. The new philosophy is: if it doesn’t exist in the market, I encourage it to be researched and for innovative solutions to be proposed.

The CPI is a public action, supported by the Ministry of Economy and Competitiveness, for which administrations select R&D+I proposals presented by private companies, sometimes financed through the CDTI (Centre for the Development of Industrial Technology). The project, which was started by the Ministry of Public Works, consists of three phases: Preliminary Market Consultation, Pre-Commercial Public Procurement (development and prototype experimentation) and Commercial Purchase (implementation of the final solution in the section). The State contracting platform enables us to track the CPI contracts which have been carried out on the Ministry of the Finance and Public Administrations website (https://contrataciondelestado.es).

The first to support this type of recruitment is the European Commission itself, which has developed several “Guidance for public authorities on Public Procurement of Innovation” to advise on these procedures. Its vice-president Antonio Tajani argues in the prologue that “European public authorities all have a responsibility to favour innovation when producing and consuming goods and services. Public procurement of sustainable and innovative goods and services is one of the essential tools for stimulating new technological or service solutions while helping to create jobs and boost the competitiveness of European industry and SMEs. It also encourages more efficient public services”.