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DSB’s Italian train debacle deepens

Ten years late and a billion kroner over budget, the saga over the Italian IC4 trains continues

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June 1st, 2012 1:01 pm| by admin
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The long-delayed high-speed IC4 trains purchased by train operator DSB will end up costing one billion kroner more than the original price tag according to calculations by weekly science newspaper Ingeniøren.

The trains have been an ongoing headache for DSB, which purchased the 83 train sets from Italian company Ansaldobreda in 2000 for 5.3 billion kroner with the intention of putting them into service in 2003.

But long delays in delivery from the Italian company, along with recent concerns over faulty brakes, mean that not one is yet in service.

According to Ingeniøren, the total cost of the IC4 trains is expected to reach about 6.4 billion kroner, despite promises made by DSB's former CEO, Søren Eriksen, that the trains would be inexpensive.

“We are going to get a very, very cheap regional train compared to the alternative,” he said at a 2009 press conference.

In late 2011, state-owned DSB told parliament that it had so far spent four billion kroner on the trains. Ingeniøren’s total, however, factors in additional payments to Ansaldobreda and VAT charges that will be owed once the trains become operational.

Ingeniøren also factors in the expected several billion kroner costs of upgrading the trains after DSB chose to purchase the trains at their most developed test state and complete the upgrade themselves.

There are also further costs resulting from DSB's limited capacity due to the non delivery of the IC4 trains. DSB has had to rent 112 double-decker carriages and maintain the ageing locomotives that pull them. DSB has not released the cost of the rental, but Ingeniøren estimates it to be about 1.5 billion kroner.

None of these costs were included by the consulting engineering firm Atkins when it last year concluded that the IC4 “ was a good train for the price”.

Poul Erik Christiansen from Copenhagen Business School said that omitting these costs was misleading.

“A fair assessment of the costs only makes sense if the incidental costs incurred [as a result of the delay] are also included,” Christian told Ingeniøren. “DSB never did that, and so the public has never been presented with a proper insight into the IC4 project's total costs.”

DSB was granted 2.25 billion kroner of compensation in 2009 from Ansaldobreda, of which 1.5 billion has already been paid. This compensation was factored into Ingeniøren's figures and according to Alex Landex, a train expert from the Technical University of Denmark (DTU), the money is probably already long gone.

“My assessment is that the compensation that was handed to DSB in 2009, in the worst case scenario, has already been eaten up from the direct and indirect costs,” he said.

IC4 trains have run in Denmark for limited periods only to be withdrawn after errors were detected.

In 2008, four trains were taken out of service in Jutland after problems with their exhaust fumes, and in 2011 the trains were once again grounded after a brakes failure almost led to an accident.

The IC4 train was custom designed for Denmark and is thought to be the reason for the lengthy delays.

Last year, it was discovered that an IC4 train was in Libya and had been given as a gift to the former dictator Muammar Gaddafi by Italy’s former Prime Minister Silvio Berlusconi without DSB's knowledge.

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