Media Study Trip «A new view: Switch to South-North Traffic» Freight Railway Undertakings in Italy Giancarlo Laguzzi, FerCargo President La Spezia, 4 th September 2015

FerCargo: who we are Evolution of rail freight over last years Gottardo’s impacts on the Italian market Results, opportunities and points of attention A B C Agenda D 2

FerCargo: who we are A B Gottardo’s Impact on the Italian market C D Evolution of rail freight over last years Results, opportunities and points of attention 3 FerCargo is an association founded in January The 16 company members of FerCargo strongly support the railway liberalization process in Italy. FerCargo believes in entrepreneurship and efficiency as key elements for the recovery of higher rail share in freight transport. The mission of FerCargo is to promote rail freight transport through the complete liberalisation of that market. The association promotes all the initiatives enabling the development of rail freight in a free market environment. In this regard, we work to ensure that – in an expanding transportation market – an increasing amount of freight is transported by rail instead of on road. By doing so, we contribute to modal shift and environment protection.

FerCargo: who we are A B Gottardo’s Impact on the Italian market C D Evolution of rail freight over last years 4 FerCargo is an association composed by 16 private Railway undertakings that operate in rail freight market. The association members are: -Captrain Italia -Compagnia Ferroviaria Italiana -Crossrail -DB Schenker Rail Italia -Ferrotramviaria -Ferrovia Adriatico Sangritana -Fuorimuro -GTS Rail -Hupac -Interporto Servizi Cargo -InRail -OceanoGate Italia -Rail Cargo Italia -Rail One -Rail Traction Company -SBB Cargo Italia Results, opportunities and points of attention

FerCargo: who we are A B Gottardo’s Impact on the Italian market C D Evolution of rail freight over last years 5 Results, opportunities and points of attention

Rail freight traffic dropped from 70,7 million trains km (year 2008) to only 43,7 million trains km (year 2014), showing a 40% reduction. Trenitalia halved its volumes from 62,8 M tkm to 27,8 M tkm FerCargo rose from 3,4 M tkm a 14,7 M tkm (quadrupling its volumes) And more: Trenitalia has received until year 2014 an annual contribution of Eur 128 M FerCargo has never received any subsidy, neither direct nor indirect The growth of companies associated to FerCargo must be attributed to their entrepreneurship but has only mitigated the drop in volumes 6 FerCargo: who we are A B Evolution of rail freight over last years Gottardo’s Impact on the Italian market C D See next page Results, opportunities and points of attention

FerCargo: who we are A B Gottardo’s Impact on the Italian market C D Evolution of rail freight over last years 7 Results, opportunities and points of attention

FerCargo: who we are A B Gottardo’s Impact on the Italian market C D Evolution of rail freight over last years 8 The base Tunnel (57 km) enables: to increase speed / capacity to reduce traction costs (reduced slopes make it possible to use only one locomotive, oggi servono while today two locomotives for triple traction are needed) The new Gottardo is a truly systemic project and cannot be reduced to a very long tunnel: for instance in Italy, with Swiss funds, Rfi is adapting modules and tunnels to enable freight trains to reach the Terminals situated in Lombardy, Piedmont, Veneto and Emilia with a maximum lenght of 750 m and without shape limits Results, opportunities and points of attention

FerCargo: who we are A B Gottardo’s Impact on the Italian market C D Evolution of rail freight over last years 9 Results, opportunities and points of attention Important advantages for the competitiveness of traffic between Pianura Padana and Northern Europe. This is due to: lack of triple traction on Gottardo and trains length of 750 (no limits on train “shape” to Turin, Milan and Venice – Rfi is adapting the current infrastructure with Swiss resources) Advantage for the harbors situated in Liguria and the areas North of Gottardo, even though limited to the savings related to the triple traction (the train length must be kept between 500 and 600 m since due to harbors constraints) Disadvantages for the competitiveness of harbors located in Liguria compared to the ones located in Northern Europe because from the second half of 2016 trains from Northern Europe will cost 10-15% less while trains from Southern Europe will cost as per today (access details to the “Third Pass” have not been defined yet, i.e. train length, shape)

FerCargo: who we are A B Gottardo’s Impact on the Italian market C D Evolution of rail freight over last years 10 Results, opportunities and points of attention Opportunities (1/2) Increase in investments on rail freight traffic (even at a slow pace) by harbors. La Spezia is the harbor with the highest share of railway transports, and is the only who has acted on the two key factors: reorganization of shuntings and investments on railways length Privatization of Fs and creation of a Newco Trenitalia Cargo, reporting to the Holding but acting as a stand-alone company,now the profits of the Passengers Division do not impose to Trenitalia Cargo to achieve positive results in the cargo business (however, “privatization” does not automatically mean “liberalization”)

FerCargo: who we are A B Gottardo’s Impact on the Italian market C D Evolution of rail freight over last years 11 Results, opportunities and points of attention Opportunities (2/2) Definition of part of current incentives to trucks to favor the intermodal transport - e.g. economic contribution to renovate intermodal semitrailers (Eur 40 M have been granted but cannot be spent so far) Virtuous contribution to the development of rail freight traffic, investing Eur 100 M for the whole market (not only to support Trenitalia Cargo) reducing tolls and creating a correlation between tolls and production levels (today only Eur 40 M have been invested, due to a law amendment which is still being implemented)

FerCargo: who we are A B Gottardo’s Impact on the Italian market C D Evolution of rail freight over last years 12 Results, opportunities and points of attention Points of attention (1/2) Difficulties to enter the Italian market for new railway companies, even after 12 years of liberalization: Entry barriers are mainly due to the rules of the Italian Rail Security Agency (Ansf) which are peculiar, strongly different from those of other European Agencies and more penalizing for railway companies (security certificate in Europe has a validity of 5 years in Europe, in Italy the validity is limited to 1 year thus increasing risks for companies) New companies cannot use incumbent’s repair workshops (for instance, to repair a wheel we need to send the locomotive to Zurich or Munich)

FerCargo: who we are A B Gottardo’s Impact on the Italian market C D Evolution of rail freight over last years 13 Results, opportunities and points of attention Points of attention (2/2) Rfi investments: Investments (for trains length and PC80 shape) related to the three corridors that are interesting for Italy (Corridor 5: Lisbon – Kiev; Two Seas Corridor: Rotterdam-Genova; Corridor 1: Berlin – Palermo) do not have a master plan. In particular, the new tunnels of Bardonecchia (Corridor 1) and of Third Pass (Two Seas Corridor) do not have a master plan to adequate access lines In addition to that (and this is extremely critical!), investments are decided without prior consultation with Freight Railways undertakings, Associations (Confetra, Fercargo…) and other stakeholders (intermodal centers…). The next 4^ package explicitly foresees the consultation with Freight Railways undertakings and we will need to wait for it