Dr Manfred Stolpe
Federal Transport Minister, Germany
Hughes: Germany's railway reform programme was launched 10 years ago. What remains to be done to turn DB into an efficient and cost-effective railway, and how can that be achieved?
Stolpe: Railway reform in Germany was long overdue, and today we can look back and say how successful the reform programme has been. At the start of the 1990s rail was consistently losing market share, despite an increase in the market volume overall. And despite high subsidies from federal government, the railway's debts were climbing dramatically. At the same time, the former Deutsche Reichsbahn had to be integrated with the western network.
All that must be considered when evaluating the success or failure of the reform. For me the verdict is quite clear - 10 years on from the start of the reform programme, the successes are there for everyone to see. The railway is now more customer-oriented, it is managing its costs, and sensible investment decisions are a clear indication of entrepreneurial management.
Staff productivity has risen by no less than 150% (Fig 1), and local passenger traffic has increased by 30% since 1994. Over the 10 years DB has invested massively in new locomotives and coaches, it has rebuilt many stations and it has adapted its services to meet the needs of the population and of the economy more effectively. And we now have more on-rail competition, which has led to more attractive services. As a government, we want to switch more traffic to rail, and that remains a truly worthwhile goal in our transport policy.
Hughes: Is DB AG going to be truly privatised with a stock market listing, and if so, what conditions will it need to meet?
Stolpe: Ensuring that the railway has the ability to act as a commercial enterprise is critical for the future. And if we are heading in the direction of a consistently commercial business, then we must tackle the question of a stock market listing.
In 2005 we want to look at all the figures and examine all the related questions so that we can take a decision.
But ahead of any listing comes the ability to be listed. DB knows that too. If all the conditions are right, the chances look good for DB AG - it is one of Germany's strong transport businesses with the advantage of a presence in international markets and a proven ability to compete.
Hughes: Competition on Germany's rail network has existed for some time. Do you think the policy of open access has been successful, and if so, why?
Stolpe: Since the reform the number of rail operators has risen considerably, and in 2003 the count was over 300. Competition has developed in different ways in the individual sectors of the business, with third-party operators now putting in bids for passenger services. Competition in the freight sector has been increasing steadily since 1999.
But true competition will only really develop if further progress is made in liberalisation of the European rail network. Germany will continue to campaign for this within the European Union.
Hughes: DB AG maintains that the costs of installing ETCS/ERTMS are too high, which means that interoperability cannot be funded. Is the federal government prepared to take on part or all of these costs? And if not, is interoperability simply too expensive?
Stolpe: Germany lies at the transport crossroads of the enlarged Europe. We are not ruling out contributing to the costs, but it is essential that acceptable funding concepts are put forward, as the biggest challenge here is the finance. Yes, investment in infrastructure equipment may be supported by the state, but this would be at the expense of other projects.
Under EU rules investment in rolling stock must be funded entirely by the transport operators, and this weighs on them heavily. So finance remains a major issue, and we will raise it in our negotiations at EU level. On this we are in agreement with DB AG.
Hughes: Further construction of new lines is envisaged in the federal transport infrastructure plan. But it seems that some planned rail projects will not go ahead as the investment funds are simply not there, partly because the fees for lorries using motorways have not been introduced as envisaged. What exactly is the situation?
Stolpe: We have carried out a thorough re-evaluation, together with DB AG, of planned rail infrastructure projects. The reasons for reassessing the projects are well known in Germany. Essentially, all departments in government have been asked to make savings to avoid overstretching the national budget, and clearly this has had an impact on investment projects to be funded from the transport budget.
Our investment is geared mainly to maintaining and modernising the existing network (p557). Projects that have already been started, especially German Unity schemes and those related to the EU's eastern expansion, will, of course, continue, and we will keep to our word. But we will only start new projects when the finance is committed and secured.
Hughes: There are suggestions that continued funding of regional rail services from federal sources is in doubt, and cuts in funding are anticipated. What is the outlook for the next five to 10 years?
Stolpe: Further funding of regional rail traffic is assured. Funds totalling €6745m in 2002 were authorised in the regionalisation law, and this sum increases at the rate of 1·5% a year to reach €7266m in 2007. The legislation will be reviewed in 2008 in order to ensure that available funds meet the demand at that time. So you cannot talk about federal funds being cut for regional services. In fact, we want to raise the quality of public transport further and ensure that regional and rural rail services, tailored to demand, are secure. The federal government, the Länder, local authorities and transport operators can be sure that there is high-level planning certainty for the long term.
Hughes: Finally, is there any future for maglev technology in Germany, and is a commercial application possible?
Stolpe: The federal government has been supporting the development and testing of high speed magnetic levitation systems for more than 30 years. It is an important technology for Germany's industrial standing and should one day find an application here. We want to exploit the opportunities for industrial development and for employment that are linked to this innovative transport system.
- CAPTION: Fig 1. DB AG's productivity, expressed in thousand passenger-km and tonne-km per employee, has more than doubled since 1993, thanks to 'more efficient processes and investment in modern technology'
- CAPTION: DB AG has rebuilt many stations with improved facilities for passengers; at Mainz a southbound Intercity service waits to depart
- CAPTION: Fig 2. DB AG's EBITDA has improved significantly over the past decade, excluding the 'special burden compensation' paid in declining amounts up to 2002 to cover structural deficits at the former Deutsche Reichsbahn. DB AG says restructuring has increased annual earnings from operations by more than €5·1bn since 1994
- CAPTION: Fig 3. Despite the withdrawal of some loss-making services, DB AG's passenger traffic increased by 11% between 1993 and 2003, lifting market share from 7% to 8%
- CAPTION: Regional rail services will continue to receive funding in the medium term; a review is scheduled for 2008
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