Christoph Götz, CEO Turnkey at Siemens Mobility, explains how relationships between stakeholders in the transport sector are changing. Driven by the urgent need for reliable and sustainable mobility solutions, and with the help of digitalization, these partnerships are rapidly redefining mobility.
Today, customers don't want us to act only as a supplier – instead, they want us to be their partner...
Is the customer-supplier procurement relationship changing?
In the past, clients sourced, sometimes with the help of consultants, a product from a supplier based on the respective specifications and the supplier's offer in a tender. These days, our customers don't want us merely as a supplier – instead, they want us to be their partner and work together, in close alignment with the consultants. There’s a slight shift in the approach: clients are asking us to tell them what the best solution for them is.
Customers want to know the best new options for all sorts of transport – shipping, rail, and road – and for people and freight. How can we move goods and people in an urban area or between urban areas in smarter ways? How can we move people in cities from their starting point to their destination without needing a car – seamlessly?
And clients are also looking for more from us than simply the strategic vision to create an innovative mobility solution and the technical expertise to execute it. They are also looking for financing solutions that match their circumstances.
Mobility these days is disruptive – just look at how many startups are aiming to find a solution to some pressing mobility topics. So there are more players around, and clients are looking for an integrated approach: innovation and expertise.
What is the latest innovation underpinning turnkey projects in rail?
A significant improvement – which is not limited to turnkey, but the benefits there are even bigger – is implementing a rail project with the help of a digital twin. Building Information Modeling (BIM), the methodology behind it, eases system integration and mitigates the risks for system integration.
With the help of the digital twin, we first build digitally and check virtually whether what we plan to build will meet the contract requirements. All partners in the project work on the same data model, and that co-creation improves project implementation. And of course, gathering the data in one model and keeping it up to date opens up the full potential of digitalization in the operations and maintenance phase. The data models can be used to simulate the passenger flow and create a simulator that prepares drivers for future operations. Dynamic data such as sensors on trains and from wayside systems enable these types of insights. BIM lays the foundations for the full rail system lifecycle.
What role do joint ventures play in turnkey projects? And what types of new partnerships are emerging?
Joint ventures have always been a way to spread the risk to more shoulders. They are also a way to bring knowledge about rail into emerging markets while still sourcing from local partners and profiting from the local know-how. While the "traditional" ways to finance rail infrastructure projects is still the vast majority, we see Public Private Partnership (PPP) models more often now. For the public sector, the benefits of PPPs are innovation, transparency, efficiency, ideal risk allocation, generation of private capital, and value for money. PPPs offer advantages, but require caution because they require substantial development resources and time pre-tender and post-tender. For this reason, engineering, procurement and construction (EPC) procurement with long-term maintenance contracts is still used in the vast majority of turnkey projects.
What are the greatest challenges in the turnkey market, and how are you overcoming them?
Cities around the world are growing rapidly: in the next 30 years, another 13% of the world population will live there. And those inhabitants are looking for reliable, affordable, and seamless mobility systems – in and between urban areas. That’s why a growing number of countries around the world are seeing the benefit of sustainable mobility and are willing to invest in infrastructure.
Mobility is followed by social and economic growth, and is of course a way to tackle congestion. Inhabitants and governments want reliable rail, which is and will stay the backbone of public transport – and they want it as soon as possible. One of the challenges is time pressure. The beauty of a turnkey approach is that it is designed as one system. Fully efficient operations can be planned from day one of implementation, and the Siemens Mobility team has proven that we can deliver to a very challenging project schedule – and even deliver early.
The views expressed herein are those of the authors; they do not neccessarily reflect the views of Siemens Mobility.