Rail Delays

Why German Trains Don't Run On Time

Fahrgäste warten am 01.09.2014 an einem Gleis des Hauptbahnhofs in Hannover (Niedersachsen). Ein erster Warnstreik der Lokführergewerkschaft GDL hat am Montag in Norddeutschland für erhebliche Probleme im Zugverkehr gesorgt. Foto: Ole Spata/dpa (zu lni "Streik der Lokführer legt im Norden Zugverkehr lahm") +++(c) dpa - Bildfunk+++
Waiting for trains in Germany.
  • Why it matters

    Why it matters

    German rail passengers and corporate customers are getting fed up over a growing epidemic of train service delays, caused largely by Deutsche Bahn’s ambitious – and very overdue – program of massive network renovation.

  • Facts

    Facts

    • Only around 80 percent of German long-distance trains are running on time.
    • The German rail network, run by a subsidiary of Deutsche Bahn, plans to invest nearly €60 billion to replace aging infrastructure and rolling stock by 2030.
    • Deutsche Bahn has slumped from an operating profit of €3 billion in 2012 to a loss of €1.3 billion last year. This could cost CEO Rüdiger Grube his job next year.
  • Audio

    Audio

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To the rest of the world, German trains still have a reputation for punctuality. But German passengers know better. Delays, sometimes shockingly long, are increasingly a standard part of the German rail system.

This January, fewer than 77 percent of long-distance trains hit their punctuality target, in spite of mild winter and few strikes. Late arrivals are up 30 percent since 2009. To put it another way: In the last 12 months, German passenger and goods trains lost a total of 174.63 million minutes, or 7,945.21 hours per day.

Now summer is looming, the traditional time of infrastructure repair and rebuilding. This, in fact, is the main reason for Deutsche Bahn’s punctuality problem — the large numbers of construction sites on the network. On a given day there can be up to 850 on the 33,000-kilometer (20,460-mile) rail network. These are often poorly coordinated, both within the company and with external events.

The wave of infrastructure repair and renewal is the centerpiece of Deutsche Bahn Chief Executive Rüdiger Grube’s ambitious plan to modernize the country’s creaking rail infrastructure by 2030, at an ultimate cost of €55 billion, or $62.5 billion.

Track and stations are to be thoroughly renovated, with high-speed trains upgraded inside and out. This year alone will see the renovation of 150 bridges, 2,000 sets of switching points and 3,200 kilometers of platforms. Impressive figures, for sure. But right now, the investment is producing more delays than anything else.

“Deutsche Bahn is simply evading its responsibilities.”

Christian Schreyer, CEO, Transdev

For Mr. Grube, this could turn out to be a very serious problem indeed. Competitors to Deutsche Bahn, such as French rail operator Transdev and Italy’s Netinera, pay DB to use its network. With delays heavily disrupting their schedules, they are now threatening to sue the Germans for compensation. The tension and controversy could cost Mr. Grube his job. His contract runs out at the end of 2017: at this rate, it might not be renewed.

Volker Kefer, Mr. Grube’s deputy and the company’s head of infrastructure and planning, has promised to better coordinate the chaotic infrastructure renewal. Building “corridors” are supposed to avoid situations like that earlier this year, when work on long-distance track completely shut down high-speed service to the Hannover Messe, the world’s leading trade fair for industrial technology.

 

ARCHIV - Der Vorstandsvorsitzende der Deutschen Bahn AG, Rüdiger Grube, spricht am 24.07.2014 im Rahmen der Deutsche Bahn Halbjahres-Pressekonferenz in Berlin zu den Gästen. Bahnchef Grube steckt in der Klemme. Der Staatskonzern kommt mit seinen Geschäften nicht voran. Deshalb will Grube ihn umbauen. Im Aufsichtsrat muss er erklären, was dadurch wie besser werden soll. Foto: Rainer Jensen /dpa (zu dpa-KORR.: «Kritische Fragen an Grube - Deutsche Bahn vor Umbau» vom 24.07.2015) +++(c) dpa - Bildfunk+++
CEO of Deutsche Bahn Rüdiger Grube. Source: DPA

 

Terrible planning like that may be a result of the chaotic situation in DB’s own planning department. Planning units for domestic and foreign rail are in the process of merging into a single subsidiary: DB Engineering and Consulting. As Mr. Kefer once put it, this was meant to “create synergies, increase efficiencies and pool competencies.” But the reorganization has dragged on for many months now – it was all meant to be finished by summer 2015, but it was only completed in April of this year.

This means 5,900 engineers, architects and building experts are, in many cases, just getting used to new workplaces and organizational units. Not an ideal time for a radical overhaul of the infrastructure.

It isn’t just passengers who are angry at the increasing chaos. Some 37 percent of German freight traffic and 29 percent of passengers are taking competing rail companies that operate under contract to state governments. These companies, now facing contract penalties for delays they didn’t cause, are looking for compensation from Deutsche Bahn.

Among those suing is Transdev, which has €850 million in turnover and 5,000 employees in Germany. Fewer than half of the trains it runs between Munich and Salzburg in Austria are currently running on time. Transdev boss Christian Schreyer puts the blame on Deutsche Bahn: “That company is simply evading its responsibilities,” he said.

If Transdev is successful in winning damages, Deutsche Bahn could face up to 40 similar cases and a bill of up to €100 million. But Deutsche Bahn is between a rock and a hard place. It could end up liable for those other companies’ losses due to delays. But at the same time, if it fails to achieve its infrastructure targets, it might have to pay back hundreds of millions of euros in government subsidies. Some of its targets are highly ambitious – the company has to modernize 875 bridges in just five years, for example.

“We are not happy with our performance right now. But we believe in the future of Deutsche Bahn.”

Volker Kefer, Deutsche Bahn head of planning and infrastructure

But for Mr. Grube, the modernization plan is absolutely unavoidable. His ambition is to see Deutsche Bahn back at the forefront of the European rail industry, in terms of reliability, infrastructure, customer satisfaction, but also profitability. The company made record profits in 2012, but things have gone downhill since, and it posted a loss of €1.3 billion last year. The company is making no money from freight transportation, in spite of record volumes on the rails. In passenger traffic, long-distance coaches are an increasingly threatening low-cost competitor.

07 p05 Deutsche Bahn-01

 

Any sustainable recovery, says Mr. Grube, has to be built on proper infrastructure. The average age of bridges is over 55 years, he says, while one third of signaling stations date to the late 19th century. The €35 billion in track investment is meant to drag these facilities into the 21st century. In terms of rolling stock, a new generation of double-decker intercity trains are rolling out of factories.

It is a huge task, and at times DB managers seem to be acting on faith as much as reason. Like Angela Merkel on refugees, they repeat the mantra: “We can do it.” Or as Mr. Kefer, the executive responsible for network planning, puts it: “We are not happy with our performance right now. But we believe in the future of Deutsche Bahn.”

 

Dieter Fockenbrock is Handelsblatt’s chief correspondent for the companies and markets desk, focusing on corporate governance, opinion and rail transport. To contact the author: fockenbrock@handelsblatt.com.

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