New agreement will benefit the Swiss rail industry

Following the conclusion of the negotiations with the OECD, SERV can now better assist the Swiss rail industry in hedging its export transactions.

For state subsidisation, in particular the financing and hedging of export transactions, the OECD countries agree on common rules that are recorded in so-called sector understandings. The offers of the Swiss Export Risk Insurance (SERV) are based on these provisions.

The OECD concluded such a sector understanding for the rail industry at the start of 2014. SERV was actively involved in its formation. The Rail Sector Understanding (RSU) is based on the broad-based OECD principles and takes into account features specific to the funding of rail projects.

Specifically, the sector understanding now permits extended credit periods of up to 14 years for export transactions in all countries except high-income OECD countries for transactions with a contract value of over 10 million Special Drawing Rights (SDR, about 14 million Swiss francs) – for high-income OECD countries, maximum credit periods of 12 years are possible under certain conditions. SERV is thus able to offer the local rail sector insurance with correspondingly extended credit periods. Until now, the credit periods were generally limited to ten years, in high-income OECD countries to as little as eight-and-a-half years.

In a press release, David Drysdale, head of the OECD Export Credit Division, stated that the easier terms for the state subsidisation of exports in the rail sector will help facilitate the redevelopment of existing rail infrastructure in OECD countries as well as new rail projects.

Switzerland will be able to benefit from this agreement in two respects: the expansion of the rail infrastructure enjoys both high priority and on the other hand some world-famous railway builders are based here.

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