European rail industry bodies UNIFE and UNISIG have pushed back against a European Commission-backed study into spiralling onboard ETCS costs, rejecting the idea that limited supplier competition is to blame, arguing instead that the real problem lies with market fragmentation.
European rail supply association UNIFE and signalling standards group UNISIG have challenged the Commission-backed study into rising ETCS costs, calling its claim of limited market competition “unjustified”. In a new paper titled The cost drivers for ETCS on-board systems: the supply industry’s perspective, they argue that costs are being pushed up instead by fragmented project requirements and the complexity of deployment.
The industry document is a direct response to the European Commission’s ERTMS Deployment Management Team report, published last year, which identified limited competition as one of several cost drivers behind the sharp rise in onboard ETCS deployment costs across Europe. The DMT study painted a sobering picture of escalating costs threatening the continent’s ERTMS roll-out, with the price of retrofitting rolling stock with ETCS doubling between 2018 and 2022, jumping from around €450,000 to €900,000 per vehicle.
Warning that the sector was “closer to the worst-case scenario than to the target envisaged”, the original report attributed the trend to a combination of fragmented national requirements, lengthy and unpredictable authorisation processes, and excessive testing. However, it also honed in on the “limited competition among onboard system suppliers” as one of the key drivers behind rising costs, listing a series of measures aimed at making ETCS tenders more competitive.
Fragmentation, not limited competition
UNIFE/UNISIG, however, state that the problem is fundamentally structural. “The DMT report states that the sector has claimed limited competition as a cost driver,” the rail bodies note. But they reject that framing, saying it is “unjustified to claim limited competition”. As evidence, they point to the existing supplier base: “Currently, there are at least seven active ETCS onboard suppliers and an even greater number of ETCS onboard products available on the market.”
“The challenge of the ETCS onboard business lies far more in market fragmentation,” the document adds, stating that competition in cross-border projects is “more limited than the mere availability of ETCS onboard products”. ETCS projects, they argue, are rarely just a case of buying and installing an onboard signalling product; in many cases, suppliers must make ETCS work alongside older national train-control systems, bring different control interfaces together for the driver and add new or country-specific functions.
For cross-border vehicles, that can mean integrating several Class B national systems, combining ETCS and legacy controls into a single Driver Machine Interface, and preparing for additional functions such as FRMCS. For retrofit projects, the work can be even harder because suppliers are often dealing with older rolling stock, incomplete vehicle information and non-standard interfaces, sometimes without full support from the original train manufacturer. “Not all manufacturers are willing to take on the risks associated with these challenges,” the authors state: “Project complexity must therefore be reduced so as to reduce market fragmentation.”
Customer requirements drive costs
Another key point of divergence is the role of operators and contracting authorities. While the DMT report identifies project-specific requirements as one of several cost drivers, the supply industry places far greater weight on this factor. According to the industry groups, customer requirements “have the biggest impact on the costs for an ETCS onboard system”.
The issue, in UNIFE/UNISIG’s view, is not simply that ETCS projects are technically complex, but that buyers often add demands beyond the baseline CCS TSI, the EU technical specification governing control-command and signalling interoperability. “Every additional requirement that goes beyond the CCS TSI increases costs, adds complexity and diverts resources away from the implementation of genuine product improvements,” they state.
Modularity not a short-term solution
Another area of disagreement is modularity. While the DMT report highlights it as a key pathway to reducing lifecycle costs, UNIFE/UNISIG takes a much more cautious view, arguing that ETCS systems are already “highly modular” and that further modularisation will not automatically deliver savings.
Any change, for example, to a safety-critical SIL 4 system, the highest railway safety certification level, still requires the whole system to be re-tested and re-certified. “These challenges will not disappear just because the components have been defined as modular subsystems,” the suppliers warn.
The industry also points to a physical hardware bottleneck: new requirements and higher safety standards have pushed existing Central Processing Units to their absolute limits. This means “simple” software updates often require expensive hardware replacements just to handle the extra processing power required by the new specifications. As a result, redesigning for modularity likely means high short-term costs, even if standard interfaces help in the long run.
Regulatory changes under scrutiny
UNIFE also pushes back on recent regulatory changes introduced under the 2023 CCS TSI, which the DMT report presents as part of the solution. One example is partial fulfilment, where the suppliers argue that removing existing flexibility will increase costs by forcing suppliers to implement functions “that may never be used or are new and have open points”.
They also question the new error correction regime, noting that suppliers often implement proprietary fixes before formal solutions are agreed, meaning later mandatory changes can add further cost. “Neither the new regulations pertaining to error corrections nor the elimination of partial fulfilment will lead to any cost reductions,” the report concludes.
Certification and ESC remain major barriers
On certification and authorisation, the report broadly aligns with the DMT document, but adopts a more critical tone, describing the process as “unpredictable, costly and resource-intensive.” Calling for simplification measures, including reducing duplication, reusing previous assessments and introducing “authorisation-free zones” for certain changes, the industry remains highly critical of the ETCS System Compatibility framework. Originally intended to streamline deployment, ESC has become “one of the biggest sources of complaint in the sector,” due to inconsistent implementation and its close link to authorisation procedures.
While essentially supporting the majority of the Commission’s analysis, the trade bodies make clear that the supply industry sees the drivers, and the solutions, somewhat differently. The paper concludes by stressing that its assessment is not complete. “The list of points above is certainly not exhaustive,” it notes: “It is therefore essential that the stakeholders engage in regular dialogue about cost drivers and agree on ways to eliminate them.”