Tuesday, February 03, 2015

Pilsen's Škoda RegioPanter wins train tender for Nuremberg area

How half a billion dollars is earned in the "hard way"

In recent years, I gave numerous physics talks in Northern Bohemia. One of the things that impressed me about that part of the country were low-floor ultramodern trains with lots of LCD displays (where lots of things are beeping all the time) etc. named "RegioPanter". I was thinking: Wow, the Czech Railways (which have been famous for its mediocre trains) must have tons of money to buy these new Western European or Japanese trains, or whatever they came from. (None of such trains run between Pilsen and Prague.)

All the technology is above the ceiling, WiFi and electric outlets are everywhere. It consumes about 1/2 of the energy that competing trains do.

It's painful but it was just one hour ago when I learned where these "RegioPanters" came from. They are produced in my hometown of Pilsen as Škoda 7Ev. Why did I learn about it? Pilsen's Škoda Transportation has just won the second huge tender in Germany. Needless to say, to beat the competitors in the German market is a source of pride for folks in Pilsen and Czechia, too. Some ex-classmates are working in that almost purely Czech company.

The trains will be operated in a big part of Bavaria, near Nuremberg. Like us, the Germans are not afraid of foreigners who run their business that are often state-owned elsewhere because they are claimed to have strategic importance. The trains in the Nuremberg area are operated by National Express, a British company, and it just chose the Škoda RegioPanter (the name was chosen in a 2011 contest/poll involving Czech tech fans) as the best solution.

In total, 38 copies of these trains will be operating there between 2018 and 2030. The Bavarian government offices have ordered National Express to deliver 7 million kilometers per year. In total, these trains should therefore have fun on almost 100 million kilometers.

The price of one vehicle is $5 million or so but the total Škoda Transportation's revenue should be $500 million. There must be some extra expenses because the first number times 38 doesn't equal the latter. But maybe National Express has just bought too lousy calculators in their previous tender. ;-)

You may calculate that the price of the "train technology" is $500 million over 100 million km which is equal to $5 per kilometer for the whole train. That's rather cheap because there are 147 or 241 seats in the train (I don't know which model they bought) so the "train expenses" may be as low as $0.02-$0.03 per passenger and per kilometer. It's still cheaper than the usual price of train tickets per kilometer so if other things are cheap, there is a potential for profit without subsidies.

This success which doesn't happen too often (so far, it's the largest deal for a Czech company in Germany; and it's really the first time in the German history when S-Bahn-type trains are served by a private company) has depended on some technological prowess of Pilsner engineers, 150 years of the city's industrial tradition, the ability of the factory to survive some minor diseases such as 42 years of communism :-) and some traps during the privatization of Škoda, and good luck. Needless to say, only a part of those $500 million is profit.

My point is that it is rather difficult to earn $500 million in the civilized world. In the uncivilized world, people expect to be given $400 billion if they simply sit in an office in one of the redundant 41 ministries for 8 hours, call themselves the middle class, and if they vote for hardcore Marxist parties that scream that their life would be too hard, the bankers and lenders are too evil, and they need to be donated this money.

Just imagine how much ouzo would have to be drunk for that nation to produce a RegioPanter vehicle. Each employee would have to drink liters of ouzo per day – and at the end, it wouldn't even be clear whether drinking so much ouzo is sufficient for constructing such a gadget. :-) Just look how NAMCO, perhaps the only Greek producer of vehicles, was gradually made incapable of producing anything.

Off-topic, Czechs in technology: In this 1929 Fox video, Czechoslovak president Thomas Garrigue Masaryk recommends Fox to become a TV station and transmit their signal in the air. They should compete with the Discovery Channel, TGM said, and broadcast pictures from the jungle of Africa. However, they should also show the jungle of the human society. Such a remote TV will force everyone to be honest, TGM apparently believed. ;-) Perhaps, Fox is fair and balanced but what about others? TGM had an American wife, Charlotte Garrigue.

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