ONE year on from the merger of French National Railways (SNCF) and infrastructure owner French Rail Network (RFF) into a single organisation with SNCF Mobility as the operator and SNCF Network the infrastructure manager, SNCF president Mr Guillaume Pepy says work is progressing to transform SNCF into an international transport group.

GERMAN Rail (DB) is one of the world's biggest transport organisations with nearly 297,000 employees (64% of them in Germany) and group turnover of around €40bn in 2015. Yet despite its size and breadth of activities, DB faces an uncertain future - largely driven by changes in its "home" market.

JAPAN is the European Union's (EU) biggest trading partner after China, but the trade in railway equipment between the two economic powers is a poor reflection of this status and the scale of their respective railway markets.

WITH significant changes in ownership structure, the shape of the railway supply industry has altered radically over the last 12 months, and further mergers and acquisitions look likely in 2016.

In January 2015 Equistone Partners Europe and French state investment agency BpiFrance confirmed they would take part in a €10m capital increase in the owner of Compin, France, enabling the seat manufacturer to acquire Spanish competitor Fainsa.

April saw British engineering and environmental specialist Ricardo purchase Lloyd's Register Group's railway consulting unit Lloyd's Register Rail for £42.5m, while in May, Greenbrier Companies acquired a 19.5% stake in Brazilian supplier Amsted-Maxion Hortolândia, South America's largest freight wagon manufacturer, for $US 15m.

The merger of the world's two largest rolling stock manufacturers CNR and CSR was completed on June 1 creating the giant CRRC Corporation. The total value of the combined assets of CNR and CSR in 2014 was Yuan 299.7bn ($US 46.9bn), and the two companies had a combined turnover of Yuan 224bn in 2014. The company continues to pursue a rigorous agenda of international expansion establishing a Sino-US Institute of Rail Transit in cooperation with universities, and breaking ground on its first assembly plant in the US in September. CRRC also opened a new joint-venture rolling stock plant in Turkey and a factory in Malaysia to serve the Asean market.

Another Asian rolling stock supplier expanding its business to the west is India's Titagarh Wagons, which completed its purchase of a 90% stake in Firema, Italy, in July. Italy's Adler Plastic will hold the remaining 10% stake in the company, which plans to invest €20m over the next 3-5 years and expand its activities in rolling stock supply, traction and electrical equipment, and train maintenance.

Wabtec confirmed on July 27 that it had entered exclusive negotiations for the acquisition of the entire share capital in Faiveley Transport. The transaction values Faiveley at €1.7bn and will create one of the world's largest rail equipment suppliers with combined sales of around €4bn. The share purchase agreement was signed in October although with regulatory approvals pending in various countries the deal is not expected to reach financial close until the second quarter of this year.

Wabtec also continued to expand its portfolio with the purchase of a number of smaller companies including US wayside sensor supplier Track IQ, US signalling contractor Railroad Controls, and Spanish suspension and vibration control system manufacturer Metalocaucho.

Škoda Transportation announced on August 4 that it had reached an agreement to acquire a controlling stake in Finnish rolling stock manufacturer Transtech for an undisclosed sum in a deal which strengthens Škoda's position in the Scandinavian market.

In September the US government approved Nokia's acquisition of a 50% stake in Alcatel-Lucent and the deal is due to be finalised in the first half of this year. Elsewhere, GE Capital sold its wagon leasing unit GE Railcar Services to Wells Fargo subsidiary First Union Rail, with the tank wagon fleet going to Berkshire Hathaway-owned Marmon Holdings, while FreightCar America sold its wagon maintenance unit to Appalachian Railcar Services for $US 20m.

As part of its strategy to expand its European transport business, Mitsubishi Electric signed an agreement in October to acquire Polish rolling stock electrical equipment supplier Medcom, while Progress Rail purchased track fastening supplier Rail Product Solutions and diesel engine fuel injection specialist Haynes Corporation. In Norway, Eltel reached an agreement to acquire signalling maintenance and project management business VETE Signaltjenester.

On November 2 Hitachi confirmed that it had completed its acquisition of Finmeccanica's rail portfolio including AnsaldoBreda and a 40% stake in Ansaldo STS, significantly expanding its rolling stock production capacity in Europe and strengthening its position in the signalling and traffic management market. Hitachi paid €30m for AnsaldoBreda and €9.50 per share for Ansaldo STS, valuing this part of the deal at €761m.

The same week Alstom announced it had completed the €12.4bn sale of its energy business to General Electric (GE), a move which leaves the company focusing entirely on rail transport. Alstom is using €700m from the sale to acquire GE's signalling business, which is expected to boost its signalling sales by 40% and increase its geographical coverage in this market. Alstom also acquired Balfour Beatty's share in Signalling Solutions, a 50-50 joint-venture established by the two companies in 2007 to bid for signalling contracts in Britain and Ireland.

In addition, Alstom has strengthened its position in the rolling stock refurbishment and heavy maintenance sector with the acquisition of Motala Train, Sweden, and a 51% stake in South Africa's Commuter Transport & Locomotive Engineering.

On November 4 the executive board of Vossloh signed a contract with Stadler Rail for the sale of its Rail Vehicles business unit for €48m in cash together with the assumption of €124m in debt liabilities. The transfer came into economic effect on July 1 and financial close is anticipated in the first quarter of this year. Vossloh is refocusing its business on track products and activities under a medium-term strategy which will also see the disposal of Vossloh Locomotives and Vossloh Electrical Systems by 2017.

Finally, on November 19 Canadian pension fund Caisse de Dépôt et Placement du Québec (CDPQ) announced that it has entered into a definitive agreement with Bombardier to acquire a 30% stake in Bombardier Transportation for $C 1.5bn ($US 1.1bn) in a deal which values the company at $C 5bn.

THIS month we are forsaking our normal format to devote almost the entire issue to one subject: the railway in 2016. We invited a cross-section of railway leaders from around the world to give us their thoughts on the current state of the railway industry and its outlook for 2016, and their responses make fascinating reading.

Our coverage is set against the backdrop of some important recent developments which will shape the future of rail transport. These include:

• the recent 11th-hour extension for the implementation of positive train control in North America which will yield a major improvement in safety
• the imminent approval of the Fourth Railway Package in Europe which should finally resolve the horrendous delays in certifying new trains and pave the way for a new era in rail competition
• the launch of Europe's Shift²Rail research initiative which aims to take rail technology to the next level to make rail more competitive
• the COP21 agreement in Paris which, if governments stick to their commitments, will boost investment in rail significantly to enable it to play a greater role in cutting carbon emissions, and
• the approval of India's first high-speed rail project heralding a revolution in rail travel in the sub-continent.

The prospects for rail transport have never been brighter, as Bombardier Transportation's new president Mr Laurent Troger observes: "The demand for rail services is at an all-time high for all segments."

The €1bn Shift²Rail programme will finally mark the end of a decline in railway research in Europe which has seen the demise of the UIC's own research centre and several national railway research divisions either through privatisation, as in the case of Britain, or following the transfer of rail vehicle design from railways to manufacturers. This was in complete contrast with North America and Asian countries where existing railway research organisations have flourished.

Efforts by the UIC's secretary general, Mr Jean-Pierre Loubinoux, during the last few years to get rail recognised by the United Nations as part of the solution to reducing greenhouse gas emissions finally paid off at COP21. Obtaining UN recognition is a considerable achievement which railways must quickly take advantage of to maintain the momentum.

Indeed, after decades of railways fighting for their very survival, we now have the rather unusual situation where political support for rail is steadily increasing. This is evidenced by the growing number of railway projects around the world as our snapshot of project highlights in 2016 illustrates.

While railways need to seize this opportunity, unfortunately this is not always evident. European transport commissioner Mrs Violeta Bulc warned recently that there will be no more EU funding for rail investment unless member states and railways embrace the Fourth Railway Package when it comes into force this year.

"We have invested a lot in rail, but I won't invest a single dime more if railways don't get involved," Bulc told delegates at the European Railway Agency s Moving Towards the Single European Rail Area conference in Luxembourg on November 23. "I want to see rail deliver a new business model. The Fourth Railway Package will deliver a 20% reduction to the cost of market entry for new operators and a 20% reduction in cost and time to introduce new rolling stock, which will produce a saving of €500m by 2025. We will support rail when it takes steps forward, but if you don't deliver there are other modes."

This is a clear wakeup call for railways, and not just in Europe, to step up to the plate and embrace change, be innovative, and make services more attractive to win new business. 2016 could prove a turning point if rail takes advantage of this golden opportunity.

LONDON Underground has invited Alstom, Bombardier, CAF, Hitachi and Siemens, which previously pre-qualified, to submit tenders to supply a fleet of 250 trains under its New Tube for London project.

BRITISH construction materials supplier Tarmac has awarded five-year contracts to four rail freight operators as it seeks to increase the volume of aggregate and other materials it moves by rail.

LIVERPOOL passenger transport executive Merseytravel announced on January 11 that five bidders have been shortlisted for a contract to supply around 50 dual-voltage EMUs for the 120.7km Merseyrail suburban network.

BRITISH rolling stock leasing company Porterbrook has awarded Turbo Power Systems, Britain, a £1m contract to supply battery chargers for its fleet of Bombardier class 170 Turbostar DMUs.

EUROTUNNEL reported on December 23 that its Le Shuttle railfreight service for road vehicles set an annual record for Channel Tunnel lorry shipments in 2015 beating the previous record set in 2012.