The impact of the Ukrainian war on rail projects in the Netherlands
Dutch infrastructure manager ProRail has indicated that rail projects will be severely affected by the war in Ukraine. In March and April, three trainloads of rails did not arrive due to the war. Consultations are currently taking place with the Ministry of Infrastructure and Water Management, other public clients, contractors and suppliers about the measures to allow work and tenders to continue as much as possible.
“A drama is currently taking place in Ukraine that has the world in its grip”, said ProRail CEO John Voppen. We are faced with an increasing uncertainty as to whether materials can be delivered on time and at what price. That affects our tenders and the work.”
War in Ukraine disrupts market
ProRail is currently making an inventory of which projects are affected by developments in Eastern Europe. It is certain that these events can have a direct impact on the feasibility of projects and the agreements that have been made about this. The war in Ukraine is disrupting the market. This is partly due to the enormous rise in energy prices, the disruptions in the logistics chain and the great uncertainty in the market. ProRail is in close consultation with the contractors.
An example of a situation that leads to shortages is that European rolling mills have closed their doors because of the rising gas price. As a result, not all transports come to the Netherlands by rail. In concrete terms, this means that three trainloads of rails will not arrive in March and April. For the time being, this concerns sixty kilometers of rails.
The production of, for example, sleepers (the lateral beams that hold the rails together) is also under pressure, because these sleepers contain steel. Wood shortages meanwhile make it difficult to carry out work on platform roofs.
Consultation on distributing financial risks
When looking for solutions, the interests of both investors and contractors must be taken into account, ProRail explains. “We will have to find a balance between dividing the financial risks between public investors such as the state, provinces and municipalities on the one hand and contractors on the other. The parties are holding extensive consultations about this these days.”
Voppen explains that the short-term consequences of the war in Ukraine can already lead to long-term effects. “We are now fully engaged in tendering for projects for 2023 and 2024. Various contractors are now working on rail projects that are preconditions for, for example, taking a new step on the rail network. Think of the next ten-minute train. If contractors or projects fail there, this will be noticeable throughout the network.
“And because there is already a shortage of people to carry out all the mobility and housing projects that are on the radar, there is a good chance that we will not be able to catch up in time. We have to prevent that, together with clients and the construction industry. By making good agreements with each other.”
This article was originally published on Spoorpro, our Dutch sister publication.