January 1 saw the hiving off of Danish State Railways' infrastructure business to form the new authority Banestyrelsen. Chris Jackson spoke to DSB Director General Henrik Hassenkam about the restructuring

THE 150th anniverary of Denmark's railways promises to be a landmark year for Danish State Railways. At the start of 1997, DSB became the latest European national rail operator to be relieved of its infrastructure. And the timetable change in June will see the long-awaited start of passenger services across the Great Belt fixed link, slashing inter-city journey times between København and the second city of Århus from over 4 h to just 2 1/2 h.

DSB's infrastructure business, including signalling, train control and power supply, has been merged with some operational units from the Ministry of Transport to form a Railway Directorate, Banestyrelsen. Like Banverket in neighbouring Sweden, Banestyrelsen will be a government agency rather than a free standing company. But with responsibility for signalling and operational control, it will have a much more hands-on role than the Finnish or Dutch network access authorities.

What is most notable about the Danish change is the speed of the decision: the restructuring was first proposed in Parliament on September 9 last year, and authorised on October 24 for implementation barely two months later. DSB Director-General Henrik Hassenkam says this was only possible because DSB Bane already had its own organisation, with its own director, management structure and separate accounting. 'Nevertheless, he expects the two new organisations 'to spend the next year or so sorting out exactly who does what ... it is fortunate that at present we are their only customer.'

Hassenkam feels 'the changes will help both organisations to be more commercial and more efficient ... each unit now has a well-defined goal.' Banestyrelsen is expected to manage, invest in, and expand the rail network, and encourage its use by any potential operator. DSB meanwhile will work to maximise the use of its services, and look to expand rail's share of the overall transport market.

DSB has been undergoing radical changes over the past three years, hiving off its bus subsidiary and withdrawing from direct involvement with the ferry business ahead of the completion of the two fixed links over the Storebaelt and Øresund. This, according to Hassenkam, has allowed management to concentrate on the core railway activities. DSB is also taking the opportunity to simplify its structure (Fig 1). The former passenger unit has been abolished and the S-bane, inter-city, regional and rolling stock sub-sectors become full businesses in their own right. The small international passenger operation becomes part of inter-city.

Banestyrelsen will have two main arms responsible for infrastructure maintenance and traffic operations (Fig 2). It will also take over DSB Bane's consulting and technical subsidiaries including the project team now fitting out the Storebaelt railway installations under contract to link promoter A/S Storebaeltsforbindels

Encouraging competition

Whilst DSB is initially the only customer for Banestyrelsen's infrastructure, Hassenkam does not expect this to last. He feels it is 'very likely' that third parties will seek to launch long-haul passenger and freight services across the Baltic once the new links are in place.

More immediately it is local services where competition is in prospect. Under its new remit, DSB will be able to advise the government that some services cannot be run commercially. Banestyrelsen would then put the routes out for contracted operation, with the aim of using competition to push down operating costs and encourage innovative solutions. Hassenkam welcomes the concept, saying DSB will bid vigorously against the private railways and bus companies who have already expressed interest. But in return he would like DSB to be able to bid to run on their tracks!

Critical to the development of competition and growth in rail's market share is the question of infrastructure access charges. This is currently an area of intense debate, as to whether Banestyrelsen should charge high rates to cover all its costs or a more nominal figure which would allow the rail operators to take on road competition more effectively. Hassenkam is firmly in the latter category, but he says the debate is by no means settled.

Tied up with the access charge question is the financing of the railway elements of the Storebaelt and Øresund fixed links. When the Storebaelt project was approved, the intention was for DSB to lease the infrastructure from state-owned promoter A/S Storebaeltsforbindelsen for 30 years, after which it would be transferred to DSB outright.

Cost overruns and construction delays have since doubled the capital cost, to the point where DSB could never afford to buy the assets. Thus the Danish Parliament has agreed a revised formula as part of the restructuring, under which Storebaeltsforbindelsen will continue to own the rail link indefinitely, along with its ownership and operation of the parallel road link. Banestyrelsen will pay DKr525m a year to lease the railway, and then charge DSB or any other operator for its use.

The international nature of the Øresund link means this must be treated slightly differently. Reflecting the status quo when the project was approved in 1991, Øresundskonsortiet has leased the rail capacity in equal shares to DSB and 'the Swedish railway operators', for DKr300m a year in 1990 prices. It is not clear whether third-party operators would buy their own access to the link, and pay extra money to the promoter, or subcontract for a share of the national railways' existing obligations. Swedish State Railways has already expressed concern that the cross-Øresund traffic to be expected in the first few years would not justify the payment of its full SKr150m share.

Investment unlocked

The emphasis today at DSB is firmly on expansion, and Hassenkam is hopeful that the changes will release funding for many cherished investment schemes. 'Railways have always been favoured among Danish politicians, but the money has not always been forthcoming. The new climate is very positive for investment, and I am very confident that something will happen.'

Not that there will necessarily be much public money up front. Under the new structure, DSB will be expected to fund its own rolling stock, rather than rely on handouts from the treasury. For this reason, both the S-bane and inter-city businesses will have the legal status of proper subsidiary companies, even if all the shares are held by DSB. Company status will allow both units to raise funding on the open market, and perhaps to exploit the growing European trend towards long-term operating lease funding.

S-bane plans

Likely to be the first major commitment to be approved under the new regime is the exercise of the option to buy a further 112 S-bane trainsets from Linke-Hofmann-Busch. Hassenkam says the decision has 'basically been taken by the government, but must still be cleared by the parliamentary finance committee.' If the order is confirmed this year as expected, deliveries would run from January 1999 to the end of 2005.

The first two innovative eight-section prototypes (RG 1.96 p19) are now in service, and 'working very well from the technical point of view.' The passengers' reaction has also been 'very positive', and DSB is eagerly awaiting the remaining six pre-series sets due to be delivered during this year.

Future S-bane investment plans will have to be agreed with Banestyrelsen, as they relate mainly to infrastructure. Top priority is double-tracking of the Ballerup - Frederikssund section, which was electrified in 1989. Since then traffic has grown rapidly, to the point where the basic 20 min interval service which the line can accommodate is proving inadequate. Hassenkam hopes that doubling work can get under way relatively quickly.

After that would come the long-planned S-bane ring line around the northwest of the city, which is mostly existing alignment with a few new connections in the west and southwest. Routing some cross-city services this way would allow DSB to provide a more intensive service on the various radial branches without overloading the already-congested core section between København H and Østerport with its long double-track tunnels. With a connection from the ring to the metro at Vanløse, passengers would be able to reach the city centre via either route.

Inter-City seeks tilting trains

Long-distance passenger services will see a radical shake-up this summer to take advantage of the Storebaelt link. Hassenkam hopes that the much-reduced journey times will boost rail's competitive edge against the parallel motorway. Although the original plan for rail to have a three year lead over road for use of the link has been overtaken by the delays, Hassenkam expects to have about a year before the road bridge is completed.

As well as domestic inter-city and international freight trains, the Storebaelt link and newly-electrified Jutland corridor will also carry overnight sleeper services to and from Germany and Western Europe - they are less time-critical and avoiding shunting at the ferry terminals will make the trip smoother. Daytime services will continue to use the Rødby - Puttgarten ferry across the Fehmarn belt, where the combination of IC3 diesel units and faster train ferries make the journey times fairly competitive.

Hassenkam says DSB's future inter-city strategies will largely be determined by the market reaction to the 2 1??2 h København - Århus timing which will be achievable with IC3s running at 180 km/h. Within the next 10 years, he would like to see this cut below 2h using tilting trainsets suitable for 200 or 240 km/h. Ideally, he says, these would be electric multiple-units, but this depends upon reaching agreement with Banestyrelsen for reconstruction of the 108 km between Fredericia and Århus.

As well as 25 kV electrification, this work would also include a number of cut-offs and realignments to reduce the curvature of the line - tilting trains notwithstanding. The inter-city business would also like to see the wires extended north from Århus to Aalborg (140 km) and west from Lunderskov to Esbjerg (55 km). This would reduce the dependence on the IC3 diesel units, which are the only diesels to be allowed through the Storebaelt rail tunnels - and even then subject to relatively strict limitations.

Re goes international

From mid-1998, inter-city and Re services will be extended from København to Kastrup Airport via the first leg of the Øresund link. This will give almost every major town in Denmark through services to and from the country's main international airport, and should help to boost DSB's competitiveness against domestic flights.

Re services today are worked with push-pull trainsets of ex-long-distance stock cascaded down by arrival of the IC3s. They are powered by EA electric locos on the 25 kV routes to Helsingør, Roskilde and Korsør, and by ME diesel locos on the other routes. The next few months will see the introduction into regular operation of the ER4 electric multiple-units (derived from the IC3s) following some teething troubles, and this will release the EAs to power electrically-hauled freight trains to and from Jutland.

Opening of the Oresund link in 2000 will see the development of an international network of regional passenger services known as Ørecity. This would integrate the København Re trains with the intensive local operations funded by the Skåne county administration in southern Sweden. Present plans envisage the creation of a jointly-owned subsidiary to run the Ørecity operations, with SJ and DSB taking equal stakes.

On October 1 1996, DSB and SJ jointly called international tenders under European procurement rules for a build of 21 dual-system EMUs with 250 seats each to operate the Ørecity services. The winning bidder is due to be announced in June or July, with the trains to be delivered by 2000.

Another dual-system order is also out to tender at present. Freight business DSB Gods, which is undergoing a major internal restructuring of its own intended to make it profitable by 1998, is evaluating bids for Class EG electric freight locos rated at 6MW each. A first batch of 8 would be delivered in 1999 to work international freight trains across the Øresund link into Sweden, but DSB has an option for another 12 to run across the Storebaelt and through Jutland into Germany.

  • Fig 1. Organisation structure for Danish State Railways from January 1 1997
  • Fig 2. Initial organisation structure for Banestyrelsen as agreed on December 3
  • CAPTION: As a forerunner to regional services across the Øresund fixed link, DSB and SJ launched Kustpilen services between København and Swedish towns with the summer 1996 timetable, using the Helsingør - Helsingborg train ferry