1. Corridor V

2. Corridor V Project Agenda A) The Cooperation on Corridor V 1.Project Origin 2.Performance Against Goals Marketing Group Production Group Quality Group B) CER’s Freight Focus Group

3. Corridor V Project Agenda A) The Cooperation on Corridor V 1.Project Origin 2.Performance Against Goals Marketing Group Production Group Quality Group B) CER’s Freight Focus Group

4. Corridor V Project Project Origin Uncompetitive technical and commercial organization Limited infrastructure capacities Unreliable and uncompetitive transit times compared to the road transport Long border crossing times Limited availability of proper wagons and traction capacities Project GOALS Competitive transit times Reliability and punctuality Availability of traction capacities Availability of right wagons Safety and Security Continuous flow of information SITUATION CUSTOMERS Eliminate production and commercial botllenecks Obtain competitive and profitable transport service Build transport service with features enabling competitive positioning Provide regular customer feedback on the Corridor V Assure regular Q-performance measurement and management Balancing of transport mode Quality of service Information to customers

5. Corridor V Project Project Structure STEERING PRODUCTIONQUALITYMARKETING Paths & Planning TractionQM ISO 9000 Profit Analysis Customer Care (Feedback) Wagons Commercialization

6. Corridor V Project Agenda A) The Cooperation on Corridor V 1.Project Origin 2.Performance Against Goals Marketing Group Production Group Quality Group B) CER’s Freight Focus Group

7. Corridor V Project Marketing Group – The Concept Marketing Plan Market Research CUSTOMERS Elasticity of Demand Cost Analysis Pricing Technical Analysis Marketing Action 1.Prepare elements needed to support actions on the existing and new markets 2.Launch marketing actions to increase the traffic volume on the Corridor V Marketing Group

8. Corridor V Project Growing traffic on Corridor V requires acquisition of new traffic in the existing markets and the development of new markets Venezia Ljubljana Budapest Zahony Hodoš Bratislava Kiev, Moskva Györ  318,1  249,8  126,3  809,5  55,8  658,3  13,4  365,2  17,2  24,0  530,8  2.106,8 Corridor V related transport flows (I-IX 02) ------------------------------- Marketing Group  export I  import I in 000 tons

9. Corridor V Project Modal Split of traffic flows to/from Italy Rail %ExportImport -------------------------------------- Hungary 11%54% Slovakia2%41% Ukraine2%0% Slovenia16%19% Rail %ExportImport -------------------------------------- Hungary 11%54% Slovakia2%41% Ukraine2%0% Slovenia16%19% (3,0 mio t) (1,2 mio t) (4,8 mio t) Different conditions on existing and new markets require diversified strategic approach Strategy -------------------------------------- Existing market Protect New markets Build Strategy -------------------------------------- Existing market Protect New markets Build 42% 58% 57% 26%17% 95% 5% Marketing Group (3,6 mio t) 27% 56% Source: Eurostat, 2000

10. Corridor V Project Wood and tiles are the two segments on the Hungarian market that can be acquired by the rail in a short-term action in 000 tons Road Transports (Hungary – Italy) 1.Identify original customers in Hungary and Italy 2.Gather information on competitive services and price 3.Build and present the offer 1.Identify original customers in Hungary and Italy 2.Gather information on competitive services and price 3.Build and present the offer Increase of the M/S +10% Increase of the M/S +10% Marketing Group

11. Corridor V Project Acquisition of goods from Ukraine is a green-field operation that will require new commercial and production solutions in 000 tons Sea Transports (Ukraine – Italy) 1.Identify customers in Italy and Ukraine 2.Identify and evaluate potential partners in Ukraine and Zahony 3.Assess competitive services and own technical and commercial requirements 4.Build and present the offer 1.Identify customers in Italy and Ukraine 2.Identify and evaluate potential partners in Ukraine and Zahony 3.Assess competitive services and own technical and commercial requirements 4.Build and present the offer Increase of the M/S +10% Increase of the M/S +10% Marketing Group

12. Corridor V Project Continous improvement of the level of the quality is necessary to defend and develop the rail market share 1.Studying Customer Satisfaction’s results it’s possible to estimate the ELASTICITY of DEMAND in presence of increasing of quality. 2.It has been considered production indexes (“delivery time of trains”) from 1997 to 2000. 3.Two kind of customers have been considered: 1.Customers that in 2000 have had a better index (respect 1997); 2.Customers that in 2000 have had a worse index (respect 1997). 4.The variations 1997-2000 of indexes and revenues of the customers have been: 1.Studying Customer Satisfaction’s results it’s possible to estimate the ELASTICITY of DEMAND in presence of increasing of quality. 2.It has been considered production indexes (“delivery time of trains”) from 1997 to 2000. 3.Two kind of customers have been considered: 1.Customers that in 2000 have had a better index (respect 1997); 2.Customers that in 2000 have had a worse index (respect 1997). 4.The variations 1997-2000 of indexes and revenues of the customers have been: Kind of Customer 19972000 With a better index4,396,17 With a worse index7,005,88 Delivery time index 19972000 293,1328,2 160,4137,3 Revenues (billions of liras) Var. % +12% -14,4% +4% per year 5.From these results it’s possible to foresee the elasticity of demand: in presence of a quality service we could have an increase of demand of 3-5 % per year. 5.From these results it’s possible to foresee the elasticity of demand: in presence of a quality service we could have an increase of demand of 3-5 % per year. Marketing Group

13. Corridor V Project Marketing Group Production Group Corridor V Market Analysis New Pricing Models Structure of transportations costs Balancing RIV

14. Corridor V Project Production Group Corridor V Analysis Border Station Operations Technical Trust Transport Planning Balancing RIV

15. Corridor V Project Dealing with the Corridor V as a virtual company WEST EAST TI SŽ MAV TI SŽ MAV Quality Policy All three companies will strive to increase transport volume to improve the market position. By linking the separate segments of the Corridor V, we build a “virtual company”, with interlinked internal processes. Our engagement will be to increase the customer satisfaction and to improve the performance of the companies. We will endeavor to make customer feel like partners. We will commit to organize our processes coherently with international standard ISO 9001:2000 Quality Group

16. Corridor V Project The plan Quality Group Preparation Organization of work. First technical and market analysis. Quality parameters to be defined. Draft of Q-Documents (Quality Policy, Train Control, Codes of Delay, Customer Satisfaction, Customer Complaints). Implementation To organize processes in accordance to standard ISO 9001:2000 national project teams and responsibilities will be defined. Processes will be identified and described, and Q-Documentation will be prepared. Quality Group

17. Corridor V Project Agenda A) The Cooperation on Corridor V 1.Project Origin 2.Performance Against Goals Marketing Group Production Group Quality Group B) CER’s Freight Focus Group

18. Corridor V Project CER’s Freight Focus Group Among the nine corridors has been selected three like a priority for the freight traffic in Europe; The Corridor V is one of these three pilot corridors and the results of the analysis on it will be presented to the Commission within June 2003. CER, in accordance with UE Commission-DG TREN, has identified nine corridors relevant to international rail freight ; The development of « freight performance improvement plans » on the above mentioned European Freight Corridors appeared as one of the necessary step to improve international freight flows;

19. Corridor V Project CER’s Freight Focus Group- Corridor V (Iberian Peninsula-East Europe) Multinational task forces have been recruited on each of the first three corridors selected. They are composed of representatives of RUs, IM and National Authorities of each of the countries concerned by each corridor. The Corridor V is the only connection analysed regarding the East and Mediterranean European Countries.