INTRO: Next month Heinz Dürr passes the reins of German Railway to Johannes Ludewig, an economist who is close to Chancellor Kohl. Inheriting a 40000 km railway halfway through an ambitious programme of reforms, Ludewig must tackle numerous unfinished tasks

HEINZ DÜRR may be leaving his post as Chairman of German Railway next month after overseeing what is widely held to be a successful reform, but the process is far from over. While Dürr was instrumental in piloting the reforms on to the German statute book, he was fortunate in being able to work with a transport minister who was equally keen to steer the project through. Appointed in 1990, the former chief executive of AEG also oversaw the huge changes that followed the fall of the Iron Curtain, and in particular the merger of East Germany’s State Railway with what was the West’s Federal Railway. It was no mean feat.

But while DB and the government have trumpeted the reforms as a great success, an assessment of DB’s performance published in March by the federal audit office was heavily critical. The report suggested that the objectives set for the reform process had not been achieved - market share of freight traffic had fallen, for example.

This prompted DB to issue a statement saying that it was no longer subject to the audit office’s scrutiny because it was organised as a private-sector company, and auditing was now in the hands of an independent organisation. After three years turnover was up 6%, the volume of passenger traffic was up 16% and DM41bn had been invested.

Second phase

Yet as Dürr hands over his offices in Frankfurt and Berlin (once the headquarters of East Germany’s Stasi secret police) to Dr Johannes Ludewig, one of Chancellor Kohl’s trusted economic strategists, much remains undone.

Preparing the railway for the second stage of the reform process will exercise much of Ludewig’s attention. An important objective will be to establish the four business sectors, Network, Long-distance Passenger, Short-distance Passenger and DB Cargo, as stand-alone subsidiaries. There is a possibility of floating the operating companies in 2002, but the Network subsidiary will remain in public hands as to do otherwise would require a change in Germany’s basic law.

While overseeing the numerous investment commitments made by his predecessor, Ludewig will also have to tackle the controversial issues of asset and staff productivity and the future of lightly-used regional lines.

Better productivity essential

To this day huge fleets of DB’s locomotives and passenger rolling stock lie apparently idle for long periods in depots round numerous major cities, and the statistics published in Rail Business Report 1997 suggest that German motive power is used less efficiently than in any other major West European country apart from Belgium. While statistical comparisons must be treated cautiously, it is extraordinary that Dürr should have approved orders for new locomotives on the basis of one-for-one replacement of the existing fleet. Where is the ’improved efficiency’ so often served up as proof of the success of the reforms?

Similar considerations apply to staffing levels. Dürr acknowledges that too many staff are employed in the network business sector, while DB’s workshops offer ’great potential’ for rationalisation. Whether Ludewig will be free to hand the workshops to Germany’s ever-hungry private industry remains to be seen.

The perceived threat of large scale closures of rural routes (p385) has encouraged strong media interest. This is partly related to DB’s strategic network review and the Netz 21 concept.

Dürr outlined the Netz 21 proposals to the parliamentary transport committee in April, saying that it would permit network capacity to be more than doubled. This will be achieved by concentrating trains running at similar speeds on to the same routes - in many cases this means assigning specific tracks to fast passenger trains and reserving others for freight.

A start is to be made next year on three corridors where passenger and freight trains will run largely on separate tracks: