Thursday, July 26, 2012

High-Powered Thinking on High Speed Rail - Part 1

As I mentioned in the post of July 12, I was fortunate enough to be able to attend the 8th World Congress on High Speed Rail (HSR). A round-table discussion kicked off the second and third days with questions to some of the most influential and forward-thinking men and women in the HSR world. Countries represented included China, France, Italy, Japan, Korea, Spain, the United Kingdom, the United States, and (transnationally) the World Bank. Panelists were presidents and CEOs of rail companies, upper-level government rail administrators, consultants, an academic dean, and a chief engineer.
Jean-Pierre Loubinoux, Director General of UIC
Moderator of Round Table 1

I've regrouped my notes from these two sessions to bring you their ideas in a more coherent, topical form. Today I'll share their thoughts about the present and future of HSR, and next time I'll turn to environmental and economic aspects.

How's it going?

In brief, HSR is having a great time except for one thing: the impact of the recession.

Ridership growth is exceeding estimates and capacity in many of the countries represented. Global congestion drives transit ridership in general, and emerging countries are experiencing a great deal of congestion resulting from population growth and a fast-growing middle class.

But economics are hurting the rail and transit agencies. Just as they need to accommodate more riders, their sources of revenue are shrinking. Globally, this has not hurt HSR as much as regional commuter and local transit services. Major investment in HSR is being made around the world despite the economic slowdown. Famously China, but also Japan and Europe are growing their HSR lines. Even Spain, despite its banking and debt situation, is investing half its $14 billion USD transportation budget in high speed rail.
HSR Trains in Málaga, Spain

Population demographics are favoring the growth of high speed rail: in real estate, 80% of growth has taken place in cities, rather than suburbs. This means that HSR, whose operation favors making connections between large center-cities, is ideal for connecting the growth hot-spots. Many observers around the world have described how innovation and prosperity increase fastest in cities, where people can most easily get together and share ideas. HSR makes it efficient and effective for people with new ideas to get together with other idea-generating people, and with sources of capital to bring their ideas to reality. It can do so with a minimum loss of productive time compared to air and highway transportation. Cities connected by HSR are prospering more than cities not so connected. As Neil Peterson said, "Agglomeration is real", referring to the economic theory expounded by Giles Duranton and Diego Puga (link below).

And how does it look for the future?

Participants identified several trends that will affect high speed rail in the coming years. (Some of these are economic, and I'll take a look at those in the next HSR post.)
  • (From Cogito, Johns Hopkins)
    Fuel prices are volatile and expected to rise (not news!)
  • Sprawl development is declining and center cities are being re-populated
  • Fewer young people (at least in the US) are getting driver's licenses
  • Young people are more inclined to make decisions at the last minute
  • A recent (unnamed) poll in California showed greater than expected differences between younger and older people
  • people are renting more and buying less in high-cost areas like housing and vehicles
Will electronic communication erode the market for transportation in general? The consensus was that although e-communication of all types has exploded in popularity everywhere, people are also traveling more. Karen Hedlund, Assistant Administrator of the US Federal Railway Administration, concluded, "Technology will never replace face-to-face interaction."

What can be done to improve HSR's future?

Lots of ideas here!

Consider HSR as part of a unified travel experience. Work to get travelers door to door, not just city to city. This means making it easy for people to book and pay for transportation regardless of mode, seamlessly, electronically, from the front door at Point A to the front door at Point B. People should be able to hop on and hop off public transportation in much the same way as they do with circulating tour buses. Work with bike-sharing and car-sharing organizations. Include taxis in the online booking and payment systems - even jitneys, rickshaws, and horse-drawn carriages where appropriate!

Take a cue from the automobile industry. Find out what your customers want, and aggressively work to give it to them. Move from providing "transportation" to providing "an experience" - and make sure it's a good one!

Barbara Dalibard, CEO of France's high speed rail company, SNCF Voyages, emphasized that the first step is to get the basics right. According to their customer surveys, the basics are:
  1. punctuality
  2. security
  3. timely information about delays and changes of service
  4. cleanliness
She went on to point out that after the basics are satisfied, what people hate most about rail travel is ... their neighbors on the train! How very true. And how very unfortunate. But as I look at my experience with public transportation, I can see it so clearly in my own behavior. Everybody tries to keep a double-seat for themselves, whether on the bus or the train. The biggest drawback to air travel in the last few years has been the near impossibility of having an empty seat next to you. On Amtrak's Wolverine service, business class - where there is a row of single-seats - is almost always sold out long in advance. I'm even willing to spend a lot of extra money on long distance trains to get a roomette, insuring privacy.

Frankfurt, Germany
Airport Station and Office Complex

So,how to provide a train both for the masses and the individuals? For families? For seniors? For businesses people? Private vehicles are available in a vast array of types, sizes, and prices, but trains provide a very limited array of accommodations. As Adrian Corry, Senior Consultant for Public Transportation at BMW emphasized, we must put ourselves in the traveler's place and ask, "What's in it for me?" (Interesting that BMW has a consultant for public transportation! And Mr. Corry appears to be a very sharp fellow.)

While the on-board experience is important - and rail has the advantage over most other forms of transport in comfort and productive use of time - the entire experience must be taken into consideration. Stations must be comfortable, roomy, and provide amenities (which, as airports have found, are a good way to increase the flow of cash from travelers' pockets to the facility's cash registers!). Boarding must be quick, and accurate information must be provided in a timely, understandable way. People with mobility challenges must be considered and graciously accommodated. Transfers to other modes of transportation must be clearly indicated and comfortably accessible.

...and the "Competition"?

One of the questions asked of the panel concerned which mode of transportation was high speed rail's most serious competition. There was vigorous and cogent objection to the question from Andrew McNaughton, Chief Engineer of the HS2 project in the UK. Transportation must be viewed as a holistic system, not as competing businesses. We heard a lot about integration and the need to make transportation a seamless experience for the traveler.

Southwest Airlines Boeing 737
landing at Dallas Love Field

Airlines that once opposed high speed rail are no longer objecting. Why is that? Because HSR (and rail in general) fills a very difficult transportation niche, the 300-500 mile segment. Neil Peterson, Executive Adviser to CH2M Hill and an airline specialist, explained that "fuel burn" was the biggest cost to airlines, and also the most unpredictable part of their budgets. Because of the way jet aircraft operate, they are very costly to fly under 500 miles. This is why airlines are dropping flights to small cities, causing consternation among the citizens. Southwest Airlines started as a short-haul provider, and it was while they provided this type of service that they effectively scuttled Texas's plan to build HSR between Dallas, San Antonio, and Houston. Now, these routes are losing the airline money. What a shame.

Into this niche are stepping the bus companies. In the US, Megabus, Bolt, and Greyhound are beginning to be more profitable (or at least not losing as much money). Buses compete effectively in the low-budget market, and SNCF in France has felt the pressure to the extent of launching its own bus lines, according to Mme. Dalibard. SNCF rates buses ten times as safe as personal automobiles, and almost as cost-effective as their high-speed trains. And buses are effective on many routes, both in competition with trains and where trains are too costly to run.
Inside Megabus
In several parts of the US, Amtrak runs bus service to extend its reach, and I've taken Amtrak "Thruway Motor-coaches" in Michigan, Florida, and California. But I'm always glad when I get to the train, because it's roomier, far less jerky, much easier to walk around in, get a drink or a snack, and use the rest room. I've ridden in Megabus double-deckers to and from Cleveland, and they're much more cramped and bumpy than the train.

For rail, the "sweet spot" is that stretch between about 200 and 500 miles: too short for airlines to make a profit, and too long for buses to be anything but numbing. Above 200 miles, conventional-speed rail (max 80 MPH) takes more than 5 hours and loses its competitive edge with air, even though the airlines are reluctant to fly in the 200 to 500 mile gap. Hence the push in places like Illinois and Michigan for 110 MPH trains, which extend the practical range of rail and could theoretically bring 300 miles down to as little as 3 hours. But that still leaves the gap between 300 and 500 miles: which is grueling by car, torture by bus, and too slow by conventional train...unless you have true HSR, running in the 150-200 MPH range.

So high speed rail should be presented as a time-management tool, rather than as a sexy technology that runs very fast. After all, the airlines don't advertise how fast their airplanes fly (though they did at first). Surveys of users indicate that 90% can use their time productively on trains, as compared to only 6% on airline flights. What a difference! That's really what can "sell" HSR.

Automobiles have an important role to play in both short- and long-distance travel (especially if we can solve the energy and safety issues that plague auto travel). One is in carrying families and small groups. Because the cost of carrying five people is essentially the same as carrying one, cars - and especially vans and SUVs - are cost-savers on family vacations. SNCF's wildly popular and capacity-constrained HSR still only carries 20-25% of the traffic between northern and southern France, according to Mme. Dalibard.

On the short-distance end, especially the "last mile", cars are critical for travelers with heavy luggage or with mobility limitations. But that doesn't necessarily mean driving your car to the station and parking it there for two weeks. Taxis have long been used for this kind of travel, but other car-sharing plans are being tried in some places. One French company encourages travelers to leave their car at the bus station, where it will be rented to others while you rent someone else's car at the other end. (I can see drawbacks to this scheme...)

In short, high speed rail is filling a useful travel niche in many countries, and is being expanded in several of them. There are trends that indicate increasing success and importance for HSR, but there are also many things that can be done to improve not only HSR but the travel experience as a whole and the many modes of travel as a system.
Next time, I'll look at the environmental and economic aspects of HSR, especially the possibilities for public-private partnership.

To learn more:

Wednesday, July 18, 2012

TOD: Heritage, Mature, and Young

I've been visiting a wide variety of cites, looking at their transit with an eye on their Transit Oriented Development (TOD). Some of these cities have had transit - specifically rail transit - "forever"; others started several decades ago; and still others are recent developments. It's interesting to compare these types of cities and speculate on the future of the newer efforts in light of the older ones. I'll introduce the idea today, and look at details in future posts.

NJ Transit's Princeton station built 1918
"Heritage" transit-oriented metro areas I've visited include New York (especially northern New Jersey), Philadelphia, Boston, Cleveland, Chicago, and San Francisco; in Germany, Düsseldorf and Berlin. In these cities, rail and rubber-tired transit have been part of the fabric of the city for so long that we might say the entire city is a TOD. Transit has allowed these cities to increase in population and remain dense, both in their core and in many of their suburbs. Of course, some "sprawl-burbs" have developed in each of these regions, but it's safe to say that without intense transit, these cities would not have grown the way they have, either in population or in layout. Also safe to say: if their rail transit were to become unavailable, they would quickly become unable to function.
Heritage: NJ Transit's
Westfield north station building
built 1892

Mature: Bethesda Metro Center
built over WMATA Metrorail station
in the mid-1980s
"Mature" transit oriented cities, those that have developed transit over the last several decades, are exemplified by Washington, D.C.; Toronto; San Diego; Los Angeles; and Portland, OR. These cities grew with rail transit in the early 20th century, and (except for Toronto) dismantled it in the decades immediately following World War II. As population and auto ownership grew, these cities found they had reached the limits of the capacity that roadways could provide. Washington's wide surface streets, designed by Pierre L'Enfant in 1791, became gridlocked; Toronto's ten-lane-wide 401 freeway became a parking lot every morning and evening; and Los Angeles's freeways were so crowded that people started shooting guns at one another in extreme road rage. These cities invested heavily in rail beginning in the 1970s and 1980s; rail quickly became popular, and though each of these cities' rail transit is "mature" in some ways, they have continued to expand their rail and bus systems to this day. Transit-oriented development has thrived in these cities, with significantly higher real estate value in the immediate vicinity of rail transit stations. If their rail systems were disabled, these cities would be in very serious difficulty - not quite the shutdown that "heritage" cities would face, but major inconvenience and disruption of a wide range of services due to many employees' inability to get to work on time.
Young TOD:
Medpark station and apartments
on DCTA "A-Train" Line, north of Dallas
currently being expanded

"Young" transit cities, those that have turned to rail in the last decade or two, include a host of cities like Charlotte, Miami-Palm Beach, Nashville, St. Louis, Minneapolis-St. Paul, Dallas, Austin, Denver, Phoenix, Albuquerque, and Salt Lake City. Jerusalem, Israel, is among cities around the world that have built a light rail line opening in the last year or so. Orlando may be the latest US city in this category, currently building stations and adapting an existing rail line for their "SunRail" commuter system. Rail facilities are optional for the cities: if they become unavailable, the city continues to operate with relatively minor inconvenience. But they are the catalysts for changed growth patterns that will lead to healthier, more sustainable communities.

What can we take away from this? First, TOD is nothing new. Second, its sustainability is demonstrated in old, compact cities like New York City, where citizens have the smallest carbon footprint in the nation. Third, growing cities around the nation (and around the world) are turning to rail as they reach the limits of their roadways' capacity. The cities that are building rail now are those that have grown significantly in the last half-century.

But in Michigan, we have the opposite problem: our population is shrinking. Our streets and freeways are crowded during peak hours, though not as badly as they were in 1990s. So are we good candidates for rail transit? If we build it, will they come? Is rail transit an incentive for growth, or simply a response to it? Were our crowded roads and lack of transit capacity in the 1990s part of the reason why Michigan's population shrank?

I invite your comments, and expect to explore this in greater detail.

Monday, July 16, 2012

Normal in Illinois is not normal in Michigan

On Saturday, the town of Normal, Illinois, dedicated their new transit center, Uptown Station. It's not just an Amtrak+Intercity+Transit bus station, it's the hub of a new development center in town that has attracted millions of dollars in new building thanks to the promise of higher speed rail on the Chicago-St. Louis corridor. This is precisely the sort of transit-oriented development that Wake Up Washtenaw was founded to advocate.

What especially interested me was something said by Secretary of Transportation Ray LaHood (former Republican U.S. Representative from Illinois). You can see a TV report on the dedication at the Secretary's official blog site (linked below).

Everywhere that I go where people make progress, everywhere that I go where people solve problems, it's because communities come together. They work together. They have an agenda. Everybody knows what the agenda is. People set aside their own egos and their own personal agendas for the common good.

I'm convinced that's the real reason Detroit hasn't gotten the funds for the M1 streetcar. Yes, the business plan was probably skimpy in details, but the underlying reason why LaHood has serious doubts about the Detroit metro area is the inability to "set aside their own egos and their own personal agendas for the common good".

"A house divided against itself cannot stand". And apparently it can't build modern, effective transit, either.

To learn more:

Thursday, July 12, 2012

Individualism, Anti-stateism, Populism, Egalitarianism...and High Speed Rail

This morning, we started our plenary session at the 8th World Congress on High Speed Rail (HSR) with an interesting short talk from Zhenhua Chen, a doctoral candidate at George Mason University. He's been studying high speed rail in the United States from a cultural perspective, and he has identified four cultural forces here that influence our acceptance of HSR.

Individualism gives citizens greater power to block HSR efforts - NIMBYism ("Not In My Back Yard") has already been felt in California's HSR efforts.

Anti-stateism results in greater power to smaller areas. As we know, three states have exercised that power to reject HSR funds.

Populism - as I understand Zhenhua's use of the term - means the public is always right. Vox populi, vox dei is the proverb: "the voice of the people is the voice of (a) god". In our country, this often means that people with the background and experience to solve a problem are seldom listened to. This may be particularly true of politicians who, after all, are elected by popular vote, not by expert opinion... And since most people find change of any kind disturbing, many of them reject "new" notions like high speed rail.

Egalitarianism is the doctrine enshrined in our national psyche that everyone is equal. In American culture (and this is my intepretation, not spelled out by Zhenhua) cars are symbols of equality. When I'm in my car, I'm as good as you are - even if my car is an old clunker and yours as a new SUV - because the laws apply to us equally. Expensive vehicles have to stop at red lights, just like cheap ones. If the SUV has a stop sign and I don't, he has to stop and I get to go. But on trains (and transit of any kind) I am pretty much who I am. I can't hide my scruffy clothes and ragged hair from the guy in the pinstripe suit with the haughty stare. So don't try to take my car away from me by funding buses, light rail, or any of the "socialist" nonsense.

I may be exaggerating this last point, but walking around in downtown Philadelphia for the last few days, I've been very aware of these differences as I pass people on the street.
So Zhenhua's conclusion was that high speed rail has an uphill battle in the United States, not just economically but culturally. He may well have a point.

But it's not hopeless. This morning, I posted on the Wake Up Washtenaw Facebook page (*do* Like it!) a note about APTA's survey of high speed rail. The overall verdict was very positive: 62% of respondents said they were either "Somewhat likely" or "Very likely" to use high speed rail if it was available.

Here are three summary charts from APTA:

How likely are you to use high speed trains?

Results by region
Results by age group

 Interesting observations and questions:

  • The Northeast has HSR now, but was less likely to ride it than the rest of the country. Why?
  • The Midwest had the least enthusiasm for HSR (though a majority are still likely to ride). Why?
  • The South, normally the most conservative part of the nation, showed the highest likelihood of using HSR.
  • The 18-24 age group is the most enthusiastic about HSR, which is great because they're the future of our country and - let's face it - HSR is way in the future for most of this country!
  • I live in the midwest and am in the 65+ age group; both these groups scored lowest in HSR enthusiasm. So what the heck am I doing in Philadelphia at the HSR conference, riding Acelas to New York and back!?!

Wednesday, July 11, 2012

Is it Really All About Density?

As I mentioned in the last post, people in the U.S. often say Europe has more rail service because of its greater density. But Is population density really necessary to support good rail service? Back in 2009, I posted a comparison of Michigan and the Japanese island prefecture of Hokkaido. In many ways, that's a better comparison with Michigan, but I'd like to take a look at Germany by way of further proof that it's not density, but population distribution that makes passenger rail practical...or not.

Density overview

Overall: Area SqMi Pop Per SqMi
Germany 137,876 81,751,602 593
Michigan 55,365 9,695,974 175
Not really fair? Germany is much bigger in area, population, and density.
But areas of Germany are comparable, just as areas of Japan are comparable. Though Germany differs much more from Michigan than does Hokkaido, it is still worth seeing how they make trains work in some of their less dense areas.

Comparing Density

These maps show that both Michigan and Germany have areas of greater and less density: Germany has two or three areas of low density, and Michigan has two or three areas of high density.
Michigan population density from 2010 census

German population density in 2010
(© 2010 Benjamin David Hennig)

To drill down in a little more detail, I compared areas in Germany with areas in Michigan. I chose to look at Germany's "land-states". (I excluded three German "states" because they are actually cites with the legal designation of "states" - Berlin, Hamburg, and Bremen. These three each are smaller than 500 square miles, so are not comparable to the areas of Michigan I chose.)

I divided Michigan into regions by location and population: the Upper Peninsula (UP) is essentially all rural, and the Lower Peninsula has many rural areas as well. The denser areas in Michgan are those in the west, around Grand Rapids and Kalamazoo; the Lansing (capital) area; the Saginaw Bay area, including Flint, Bay City, Saginaw, and Midland; and of course the southeast. For this purpose I've defined the southeast region as Wayne, Oakland, Macomb, Washtenaw, Monroe, Jackson and Livingston Counties, but I've also done the numbers on two sub-areas: the urban core - Detroit, with Wayne, Oakland, and Macomb counties; and the core plus Washtenaw County.

This table shows German and Michigan regions together, in order from least to most dense:
Area Location Area (mi²) Population Pop. per mi²
Upper Peninsula total Michigan 16,419 311,361 19
Lower Peninsula rural areas Michigan 27,461 2,107,903 77
All of Michigan Michigan 55,365 9,695,974 175
Mecklenburg- Vorpommern Germany 8,949 1,642,327 184
Brandenburg Germany 11,381 2,503,273 220
Lower Peninsula total Michigan 38,946 9,384,613 241
Capital Urban Region Michigan 1,709 452,559 265
Bay Urban Region Michigan 2,781 833,258 300
Saxony-Anhalt Germany 7,894 2,335,006 300
Thuringia Germany 6,244 2,235,025 357
Lower Saxony Germany 18,381 7,918,293 430
Bavaria Germany 27,239 12,538,696 461
Schleswig- Holstein Germany 6,100 2,834,259 464
Southwest Urban Region Michigan 2,493 1,288,942 517
Rhineland- Palatinate Germany 7,665 4,003,745 523
Saxony Germany 7,110 4,149,477 588
All of Germany Germany 137,876 81,751,602 593
Hesse Germany 8,152 6,067,021 743
Baden-Württemberg Germany 13,803 10,753,880 780
Saarland Germany 992 1,017,567 1,036
Southeast Urban Region Michigan 4,503 4,701,951 1,044
North Rhine- Westphalia Germany 13,159 17,845,154 1,355
Core + Washtenaw Michigan 2,677 4,208,715 1,572
Core (3-county) Michigan 1,967 3,863,924 1,964

What I found is that the dense areas of Michigan rank right up there with the dense areas of Germany. Although Michigan's dense regions are also smaller in area and population than the densest German regions, this chart shows that their potential for service by passenger rail is comparable.
Densest 8 areas in Germany (red) and Michigan (blue)

That's not to say that all areas of Michigan invite practical passenger rail: the UP and the northern LP are poor candidates for it, except possibly for seasonal service to resort communities in the northern LP. (By "practical" I don't mean "profitable". I mean that subsidized rail service, like subsidized roads, will bring measurable economic benefit to the region.)

Service in sparse German regions

For comparison, let's look at the service that's available in the least dense German state, Mecklenburg-Vorpommern, with an area of 8,949 square miles and 2010 population of 1,642,327. Density is only 184 per square mile. That density is the same as Eaton County (Charlotte), Michigan, though the Germany state is sixteen times larger.

Here are a couple of sample rail trips:
  • Berlin to Schwerin (pop. 95,220) is about 130 miles, comparable to the distance from Chicago to Kalamazoo (138 miles). Deutsche Bahn (DB) takes about 2 hours 15 minutes; Amtrak takes about 2 hours 30 minutes. DB offers 9 trains on weekdays and 11 on Saturday; Amtrak offers 4 trips every day.
  • Schwerin to Stralsund (pop. 57,670): 103 miles. DB offers 12 trains daily; the trip takes about 2 hours. This service would not be dissimilar to service from Lansing (pop. 114,321) to Port Huron (pop. 32,338): about 108 miles. Michigan funds one Amtrak trip each day, and the trip is scheduled for 2 hours 42 minutes.

Alternatives: the Cost of Driving

One important factor in the practicality of passenger rail is the cost of driving. That, of course, depends to a large extent on the price of gasoline. On-line services make discovering this easy, so I checked on Berlin, Schwerin, and Stralsund to see how much it would cost to fill up in each of the cities I used above as examples of rail frequencies. As of this moment (July 10, in the wee hours of the morning in Germany, converted to US dollars per gallon):
  • Berlin $7.533 per gallon
  • Schwerin $7.622 per gallon
  • Sralsund $7.711 per gallon
So, to put 10 gallons in the tank would cost $75.37 in Berlin, $76.22 in Schwerin, and $77.11 in Stralsund. A real incentive to take the train.


So, is it really about density? Like most complicated situations, the answer isn't simple. Density is a factor, but It's not population density by itself that makes or breaks passenger rail for a region. It's the distribution of population within that region. We have the density in much of Michigan to make more frequent passenger rail feasible within and between four dense regions: the southeast, the Saginaw Bay region, the capital area, and the southwest.

Let's get it going before gas prices rise to German levels.

Wednesday, July 4, 2012

How do They Do It?

We Americans often shake our heads at the European rail systems, wondering how they do it. The most frequent answer is population density. The theory is, if you have enough people living in a small enough area, you can afford good public transportation there. I'd like to take a look at that in more detail in another post, and look now at some of the details of organization and financing for rail service in Germany to answer the question from that perspective.


DB's signature ICE-2 high speed trainset in Cologne
In my last post, I compared government-run service in Germany with privately run service in the United Kingdom. To be strictly accurate, though, Deutsche Bahn (German Railway, DB) is a private company majority-owned by the German Federal government. That makes it somewhat like Amtrak in its corporate structure, but the resemblance ends there. DB is one of the largest and most successful transportation and logistics providers in Europe.
Structurally, the organization is consolidated under a holding company, DB AG. Internally, the structure has undergone a number of reorganizations in the years since its "privatization" in 1994, and as of the end of 2011 consists of these main groups:
  • DB Bahn Long-Distance runs passenger trains, mainly in Germany;
  • DB Bahn Regional runs trains and buses in German cities, suburbs, and exurbs;
  • DB Schenker runs freight trains across Europe and supplies other logistics services;
  • DB Netze builds and maintains the German rail infrastructure, including stations and rail lines, and electric power for the trains;
  • Arriva, a recently acquired British company, operates rail and bus services in several European countries other than Germany.
DB Netze is in charge of 23,863 miles of track. The right of way, for the most part, was inherited from predecessor railways when DB was formed, although I believe new right of way has been acquired to create highspeed-only lines. In 2011, DB ran 5,261 freight trains daily, and 25,532 passenger trains (including local and long-distance). Those carried 412 million tons of freight and nearly 2 billion passengers (remember I said passengers were kings of the rails in Germany?). Oh - and DB carried 756 million passengers in its bus fleet that year as well.
Two buses from DB-operated Suedostbahn converge
at the Mummelsee resort in the Black Forest
on Sunday morning (!), May 20, 2012

Looking at the company's 2011 cash flow statement, a couple of important points emerge. First, the company made a lot of money from its operations: €3,390,000,000, roughly $4.2 billion in US dollars. This, after subtracting expenses and finance costs, left €203M profit, roughly $255M in USD. In addition, the German Federal government, which owns all or most of the stock in the company, received a €500M ($630M) dividend payment. (In 2010, however, the company had a net loss of €43M, about $55M, having spent a lot to purchase the Arriva group.)

This positive cash flow, plus government stimulus funds, enabled all the DB units to invest heavily in new capital projects in 2011, for a total of €7.5B, or $9.4B. Of this, 79% went to infrastructure, 11% to refurbishing old and purchasing new passenger equipment, and the rest to freight, logistics, and other projects.

Other Trains in Germany

But DB is not the only rail operator in Germany. As part of the European Union (EU), Germany must comply with the 1991 EU rail directive (91/440/EEC) and its updates, mandating open access to rail infrastructure for private operators and trains from other countries. In practice, DB has a virtual monopoly on long-distance trains in Germany, and the European Commission has filed a law suit against Germany (and most of the other countries in the EU) for not properly implementing the 1994 rail directive. Other countries, especially neighbor France, operate their trains through to German destinations. Within Germany, though, the only notable non-DB long distance trains are a handful operated by Veolia, the French multinational conglomerate that also operates commuter service in Boston and south Florida.
French company Keolis operates the Eurobahn train,
seen in Duesseldorf's main station.

Local and regional service in Germany is not provided directly by DB. It isn't profitable even there, so under German law, the state and local governments provide the funds necessary to operate and maintain local public transportation. They all provide a rich variety of transit options, but they do it in a number of ways. Some directly own and operate transit through the equivalent of US regional transit authorities; others using their authority to contract with private and semi-private companies to provide various services. Since, in the EU, such contracts normally go to the low bidders, quite a few companies have been created in Germany or have come in from abroad to do business. DB is one such company, and runs regional services under contract through its DB Bahn Regional operating unit.

"Lower Saxony is on board"
on a Metronom commuter coach
A good example of an operating company that was formed especially to provide regional transportation is Metronom Eisenbahngesellschaft mbH. It provides rail services in the northwest part of Germany around Hamburg and Hanover. It was originally formed in 2002 as a stock company in order to replace service previously provided by the Regional entity of DB. The three states in area -Lower Saxony, Hamburg, and Bremen - formed wholly-owned rail company shells, which in turn purchased stock in the joint railroad, Metronom. In 2007, part of the stock in the Lower Saxony rail company was put up for auction and purchased by Arriva, then British-owned. That made Arriva the largest stockholder in the company, with 30.7% of the shares. Arriva was purchased by DB in 2010, but the EU anti-trust agreement required DB to divest itself of Arriva's German holdings. The purchaser (in 2011) was Netinera, a company jointly owned by the Italian State Railways and investment company Cube. So at present, regional service in northwest Germany is provided by a conglomerate of three states, a foreign railway company, and an investment company. The states and the passengers provide the money, and the railway company operates the trains. Most of the stations are owned and operated by DB Netze, except those which aren't served by DB and are owned by the individual state rail companies. All this is pretty complicated, but that's how public-private partnership works.

Paying the Piper

Although the EU requires all countries to report the accounts of their railway operations, it's not easy to find the information online. DB's corporate accounting reports do not break out operating cost; only the balance of income minus expenses. So I can't tell you (now, at least) how much Germay spends on its rail transportation. But I can give you some interesting tidbits...
  • Railway operating costs in 2005 were about 75% covered by income; the rest came as government subsidies. In 2001, the subsidy amounted to about 7.5 euro-cents for each passenger-kilometer.
  • When DB was organized in 1994 as a government-owned company, the predecessor, German Federal Railway (Deutsche Bundesbahn) had a debt of €68 billion, which was taken over by the Germany Federal government.
  • European railway infrastructure organizations like DB Netze charge for all trains that use their rails. In Germany in 2005, that charge covered only about 60% of the actual cost of the maintenance.


The outcome of it all is that the German governments, state and federal, have invested a lot in their infrastructure over the years, and continue to subsidize rail operations. In response to EU and internal urgings, rail service has been partially decentralized and competition has been (theoretically) introduced. The federal government of Germany made a sizable profit in 2011 from its earlier investment in long-distance rail, while the states are paying for regional and local transit. I don't know the status of the €68B debt inherited by the Federal government from pre-1994 railroad.

Light rail vehicle in a Karlsruhe street.
These provide local service to outlying towns
as far as 30 miles away.
From the passengers' point of view, the system works as a pretty seamless whole. Local rail operators, for the most part, join with DB in a ticketing union that allows passengers to go from one part of the system to another pretty much without regard to who operates it. (The exceptions are some of the local subway, streetcar, and bus lines.)

Bottom line: German railways cost the government money, but there is an ongoing effort to open railways to competition and so get the costs down. The UK has been quite successful in making its railroad operators compete and pay their own operating costs, but the British government still pays about half the infrastructure costs. Both countries have very good passenger rail systems, providing frequent, fast, comfortable, and reliable service. We can learn from them...but do we have the population density to make it possible? Next time...
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