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Private Rail in Germany: The Example of Connex. Overview:. Rail reform as the legal background: Open access “Regionalisation” as a new way of financing regional rail Connex as the biggest independent rail operator: Concept and philosophy. Rail reform: The situation in 1991/92.

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Rail reform as the legal background:

  • Open access
  • “Regionalisation” as a new way of financing regional rail

Connex as the biggest independent rail operator:

  • Concept and philosophy
rail reform the situation in 1991 92
Rail reform:The situation in 1991/92
  • Bundesbahn and Reichsbahn (former GDR) in desolate economic situation
  • Dwindling market share compared to road transport in spite of high state subsidies
  • Urgent need of investment
recommendations of the p llmann committee
Recommendations of the “Pällmann-Committee”:

More Competition!

  • By intramodal competition service quality and efficiency will be improved
  • By better service quality and efficiency the trend towards road transport will be stopped, maybe even reverted
  • New market participants will bring new know-how and fresh money
recommendations of the p llmann committee1
Recommendations of the “Pällmann-Committee”:

Instruments to achieve competition:

  • Opening of rail infrastructure for independent operator
  • Financing of the deficit of regional rail through the federal states (“Länder”).
  • “Customer-client principle”: States are allowed to order regional rail services from other operators than DB
  • Complete opening of the market for (non-subsidised) long-distance passenger rail
opening of rail infrastructure
Opening of rail infrastructure

Deutsche Bahn was divided into

  • Transport subsidiaries (regional rail, long-distance rail, railfreight)  DB Regio, DB Reise & Touristik, DB Cargo (=Railion)
  • Infrastructure companies (tracks, stations)  DB Netz AG, DB Station & Service
  • Both divisions have separate accounting. In the long term both divisions would have been completely separated.
opening of rail infrastructure1
Opening of rail infrastructure
  • Independent train operators is given discrimination-free access to infrastructure (tracks, stations) – for a fair user fee, of course
  • Similar EU legislation was implemented by directive 91/440

Financing of the deficit in regional rail until 1994:





Simple balancing of the whole deficit


Federal states


Financing of regionalrail from 1995:

Regionalisation funds

(ca. 7 Mrd. Euros/year)


Train operators:

... and ca. 30 others



  • Integration of regional know-how of the passengers’ needs
  • Clear responsibility
  • More transparency of the costs of regional rail
  • More efficient use of state subsidies
results of regionalisation 1
Results ofRegionalisation (1)
  • Increase of offered transport capacity (train kilometres) by 20 to 30 percent
  • On average slowly growing passenger number –against the overall trend in public transport
  • Spectacular passenger increases at some projects
  • Market share of independent train operators grew to 9-10 % (Connex 3 %)
results of regionalisation 2
Results of Regionalisation (2)
  • When tendering regional rail, the states/PTAs have realised savings of 15-25% - at the same or even better service level.
  • Some lines could be saved from closure and successfully revitalised
connex in the regional rail market
Connex in the regional rail market
  • Ca. 700 employees
  • 7 subsidiaries
  • 2 long distance trains
  • 1612 km line length
  • 19,2 Mio. train-km 2004
  • 153 Diesel railcars
  • 3 conventional trains with loco
  • 248 Mio. Euro turnover 2003(excl. rail cargo, incl. bus)
  • Turnover 2004: 336 Mio. Euro
connex in the regional rail market1
Connex in theregional rail market

Market share in regional rail:

  • By train-km ca. 3 %
  • By turnover ca. 2 %
  • Main focus is - due to tendering practices - on secondary lines
the connex way
The Connex Way

Regional approach:

  • All Connex operations show a “regional face” to the customer. Goal: Passenger and PTA should call it “our railway”. “Global players” are unpopular with the German passenger (situation is different in railfreight)
  • Basically regional brandswith Connex co-branding
  • Joint ventures with municipally owned transport companies are possible:
the connex way1
The Connex Way

Decentralised company structure:

  • Powerful medium-sized regional subsidiaries with powerful managing directors
  • Headquarter is mainly “service provider”: Legal affairs, taxation, partially finances and communications – it is not an all-powerful headquarter in a traditional way
  •  Self-sufficiency of the subsidiaries allows quick decision-making in most cases
the rolling stock of connex
The rolling stock of Connex

Mainly three types of DMU with similar characteristics

  • 120 km/h
  • 2 x 275 or 2 x 315 kW with mechanic power transmission
  • 120-150 seats

Alstom LINT (38)

Bombardier Talent (53)

Siemens Desiro (18)

the rolling stock of connex1
The rolling stock of Connex

Three conventional trainsets, consisting of electric loco (class 185) and 4-6 refurbished express train cars (140 km/h)

the rolling stock of connex2
The rolling stock of Connex

From Dec. 2005 on the Hamburg-Island of Sylt route:

Diesel-hauled push-pull trains with 6-12 cars,

140 km/h (Cars can run 160 km/h)

outlook for the future
Outlook for the future
  • Municipally owned operator enter the market with dumping bids
  • Legal situation concerning contracting procedures and tendering unclear – contradictory laws and court decisions
  • Connex has to confirm its position as a reliable partner and high quality operator