http://www.modern-railways.com April 2019 Modern Railways 79
Europe View
to improve its focus on the German market and
its finances. The report says both companies are
profitable, but that the profits are almost entirely
reinvested in DB’s business outside Germany,
thereby adding little value to the German public,
which both owns DB via the government and is the
main user of its services (trains and infrastructure).
The Bundesrechnungshof believes sale of the
two companies would generate a substantial
cash inflow, enabling DB to reduce its overall debt
levels. Privatisation of other DB subsidiaries in the
future is also identified as an option to enable the
organisation to focus on running the railway.
The report calls for a much clearer separation of
infrastructure management from rail operations,
something DB has long opposed, with national
infrastructure manager DB Netze being an
integrated part of the overall DB group. The
report says the key objectives of the German
rail reforms of the mid-1990s have not been
achieved; traffic has not switched from road in any
quantity and the new DB AG, which combined
West German Deutsche Bundesbahn and East
German Deutsche Reichsbahn in 1994, is now
heavily indebted; the predecessor companies
had no debt at the time of the merger.
DB currently has nearly €20 billion of debt and
according to the report is unable to generate
enough money to fund necessary investment in
new trains or infrastructure without either more
debt or additional sources of funds. The auditors
do not place all the blame on DB, making it
clear that successive governments have failed
to determine what they want DB or the railway
industry to achieve. The report stresses the
government should create a coherent national
intermodal transport strategy to remove some of
the current distortions caused by infrastructure
payments (or lack of them) and taxation differences
between differing modes of transport.DB PROMISES ACTION
ON PERFORMANCE
DB presented a five-point plan to improve
reliability and performance to the Federal Transport
Minister and wider public in mid-January. Thecompany has suffered declining profitability in
much of its German domestic operations due
to competitive pressures, especially for regional
train operation (with major contracts lost)
and long-distance services (where passenger
numbers are up but lower yields from fares mean
relative profitability is declining). Rail freight
subsidiary DB Cargo continues to make losses.
Overall, DB group profitability declined in the
first half of 2018, and is forecast to deteriorate
further, despite increasing turnover (€21.6 billion
for DB group in first six months of 2018, up 2.3%
on the same period in 2017). It was reported in
mid-December that DB was planning an increase in
its debt ceiling to €24 billion (from the €20.4 billion
previously agreed with government).
Improving poor punctuality, especially for
long-distance services, leads the five-point plan,
with an improvement of 1.6% targeted to an
average 76.5% of long-distance trains being
on time in 2019. This target, which requires
improvement on 2018 performance, is realistic;
the actual target in 2018 (set back in 2016) was
90%, whereas performance was 74.9%! However,
in December 2018 76.9% of DB long-distance
trains were recorded as on time – meeting the
new target. DB defines a train as on time if it
arrives within 5min 59sec of its scheduled arrival;
on this measure rounded to whole minutes
(within six minutes of scheduled time), data
for December suggests DB actually performs
better than many UK long-distance operators.
DB plans to improve rolling stock reliability in
2019, with 200 more staff being employed at the
key ICE depots in Köln and Hamburg, and work
is underway to increase capacity at DB’s Krefeld
works, which overhauls many long-distance trains.
DB is aiming to have 225 ICE trains available daily
in 2019, an increase of 5% compared to 2018, in
part by retaining older trains as new ICE4 trains
enter the fleet throughout the year and partly due
to better maintenance increasing availability.
DB’s performance operating regional and
city S-Bahn services is consistently much more
punctual than long-distance services, with 94%
‘on time’. Despite this, according to local media DBis paying around €500 million a year in penalty
payments to regional transport authorities for
failing to meet performance targets on multiple
contracts; the reports suggest these payments
will rise to over €650 million by 2023.
The other four key priorities as set out by
DB are a mix of activities that both DB and the
government can take credit for such as ‘investing
in the network’. DB and the Government will
spend €10.7 billion (€1.3 billion more than in
2018), which DB describes as ‘an unprecedented
level of investment’ to make the rail network more
effective and reliable. Of this, around €1.1 billion
will be spent on the rollout of ‘digital railway’
technology such as European Train Control System.
DB also says ‘turning around the rail freight
business DB Cargo’ is a priority; few politicians
will argue with the concept, although some of
the company’s problems in recent years were
self-inflicted due to cost reduction schemes
that lost key personnel. DB plans to reverse
the cuts of recent years by recruiting more
personnel and additional investment in sales
people and new locomotives (more Vectron
locos were ordered recently – p81, last month).
The other priorities set out by DB were rather
more prosaic – ‘providing passengers with better
information and service’ by expanding the existing
digital passenger information/retail platforms and
upgrading information systems at major stations.
DB also said it would ‘widen its offer’, with 4% more
seat kilometres added to its long-distance network
since the December timetable change, although
in practice this largely refers to the long-planned
introduction of new ICE4 and IC2 trains
(15 Class 412 ICE4s and 10 IC2s with Class 147.5
Traxx locos entered service in December).DB BUYS TALGO
INTERCITY TRAINS
DB has ordered 23 new long-distance trains
from Spanish manufacturer Talgo to replace
older Intercity trains in use with subsidiary
DB Fernverkehr. The initial order is worth
€550 million, and the master agreement
includes options for up to 79 more trains.Rebuild: IDS loco No 365 001 (formerly SNCB’s No 1203) approaches Břeclav on 22 December 2018 with a cereals train from Slovakia. Keith Fender078-081_MR_Apr 2019_europe.indd 79 11/03/2019 17:28