Railway Reform in Germany: Restructuring, Service Contracts, and Infrastructure Charges

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Railway Reform in Germany: Restructuring, Service Contracts, and Infrastructure Charges Railway Reform in Germany: Restructuring, Service Contracts, and Infrastructure Charges vorgelegt von Diplom-Volkswirt Diplom-Ingenieur Benedikt Peter aus Berlin Von der Fakultät VII – Wirtschaft und Management der Technischen Universität Berlin zur Erlangung des akademischen Grades Doktor der Wirtschaftswissenschaften Dr. rer. oec genehmigte Dissertation Promotionsausschuss: Vorsitzender: Prof. Dr. C. Helberger Berichter: Prof. Dr. K. Mitusch Berichter: Prof. Dr.-Ing. habil. J. Siegmann Tag der wissenschaftlichen Aussprache: 30. April 2008 Berlin 2008 D 83 CONTENTS 1 OVERVIEW ........................................................................................................... 6 2 RAILWAY REFORM IN GERMANY - NEGOTIATIONS IN THE RESTRUCTURING OF A PUBLIC FIRM ......................................................... 11 2.1 Introduction................................................................................................................ 11 2.2 Railway Reforms in Germany ................................................................................... 12 2.2.1 The German Rail Reform of 1994 .................................................................... 12 2.2.1.1 The Historical Background........................................................................... 12 2.2.1.2 Setting the Stage: The Regierungskommission Bundesbahn........................ 15 2.2.1.3 The New Sector Structure............................................................................. 18 2.2.2 The Regionalisation of 1996 ............................................................................. 23 2.2.3 The Task Force „Zukunft der Schiene“ of 2001 ............................................... 26 2.2.4 Conclusion: Driving Forces of the German Rail Reforms................................ 31 2.3 Funding Mechanisms and Subsidies for the Rail Sector............................................ 36 2.3.1 Financial Relationships and Incentive System of the DB Netz AG since 1994 36 2.3.1.1 Subsidised Transport Services: Regionalisation Funds ................................ 40 2.3.1.2 Subsidies for Infrastructure and Transport ................................................... 41 2.3.2 Conclusion: Incentives for the DB Netz AG to Invest...................................... 44 2.4 The Political Economy of Railway Subsidies and Performance: A Theoretical Assessment of the German Experience...................................................................... 47 2.4.1 The Problem...................................................................................................... 47 2.4.2 The Bargaining Model ...................................................................................... 48 2.4.3 General Applicability of the Model .................................................................. 55 2.4.4 Interpretation of German Railway Politics as a Bargaining Process between Politicians and the DB AG ................................................................. 56 2.4.4.1 The Meaning of L and B: Activities Generating Political Benefits.............. 56 2.4.4.2 The Meaning of t: Gross Subsidies............................................................... 61 2.4.4.3 The Meaning of C: Political Costs of Subsidy-Generation .......................... 62 2.4.5 The Model’s Results: Evidence on Corporatisation and Privatisation.............. 63 2.5 Conclusion ................................................................................................................. 67 3 REGIONAL RAIL PASSENGER SERVICES IN GERMANY: COMPETITION AND CONTRACTS................................................................. 71 3.1 Introduction................................................................................................................ 71 3.2 Development of the Market since 1996..................................................................... 72 3.2.1 The Current Institutional and Legal Framework............................................... 73 3.2.2 Strategies of Competitors and Market Entry Barriers....................................... 80 3.2.3 Effects of Competition ...................................................................................... 89 3.3 The Service Contracts................................................................................................ 93 3.3.1 Our Data Set...................................................................................................... 96 3.3.2 Contract Duration and Network Size ................................................................ 99 3.3.3 Service Definition ........................................................................................... 102 3.3.4 Risk Allocation ............................................................................................... 105 3.3.5 Additional Incentive Elements........................................................................ 109 3.3.6 Contract Adjustment ....................................................................................... 112 2 3.4 The Influence of Specific Investments and Uncertainty on Contract Duration and Contract Completeness: Empirical Results ......................... 114 3.4.1 Transaction Cost Economics........................................................................... 114 3.4.2 Determinants of Contract Duration................................................................. 118 3.4.3 Determinants of Contract Completeness......................................................... 131 3.5 Conclusions.............................................................................................................. 142 4 RAIL INFRASTRUCTURE CHARGING IN THE EUROPEAN UNION....... 147 4.1 Introduction.............................................................................................................. 147 4.2 Objectives of Rail Infrastructure Charging Systems ............................................... 148 4.2.1 Components of Rail Infrastructure Costs........................................................ 149 4.2.2 The European Policy on Rail Infrastructure Charges...................................... 153 4.2.3 Economic Objectives of Rail Infrastructure Charges...................................... 155 4.2.4 Pricing Principles ............................................................................................ 158 4.2.5 Conclusion ...................................................................................................... 167 4.3 Rail Infrastructure Charges in the European Union................................................. 169 4.3.1 Marginal Cost Prices....................................................................................... 170 4.3.1.1 Sweden and Finland.................................................................................... 170 4.3.1.3 Conclusion .................................................................................................. 175 4.3.2 Cost Covering (Linear) Tariffs........................................................................ 176 4.3.2.1 Austria......................................................................................................... 176 4.3.2.2 Switzerland ................................................................................................. 178 4.3.2.3 Germany ..................................................................................................... 180 4.3.2.4 Conclusion .................................................................................................. 187 4.3.3 Non-Linear Tariffs.......................................................................................... 188 4.3.3.1 Luxembourg................................................................................................ 188 4.3.3.2 United Kingdom......................................................................................... 190 4.3.3.3 Conclusion .................................................................................................. 194 4.4 Recent Developments of the Charging Systems...................................................... 195 4.5 Comparisons and Recommendations....................................................................... 198 4.6 Conclusion ............................................................................................................... 205 ANNEX 1: OUR QUESTIONNAIRE ......................................................................... 207 ANNEX 2: DESCRIPTIVE STATISTICS OF THE MOST IMPORTANT VARIABLES............................................................................................. 216 ANNEX 3: INFRASTRUCTURE CHARGES IN FRANCE ...................................... 220 REFERENCES ............................................................................................................. 226 3 LIST OF FIGURES Figure 1: Steps of the German Railway Transportation Act .......................................... 21 Figure 3: Regionalisation Funds – Total and for the DB Regio AG .............................. 43 Figure 4: Internal and External Funding of the DB AG in 2004 ................................... 44 Figure 5: Bargaining between Manager and Politician .................................................. 53 Figure 6: Federal Subsidies for Regional Passenger Transport in Germany.................. 74 Figure 7: Funding of Regional Rail Passenger Transport in Germany .......................... 75 Figure 8: Market Shares of Strategic Groups in 2004 (percentage of train-km)...........
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