Richard Lutz wants to convince with this concept

Without the train, according to the core message, all ambitious climate targets in Germany will fail. If his plan goes through, it could also be close for Lutz at the top of the track.

The 55-year-old can not afford a fuss. No more. At first even notorious railway critics accompanied him with benevolence. Two and a half years ago, Lutz announced that he would be the CEO of "starting from the top". That was well received.

At the turn of the year, however, it looked as if the massive delays of long-distance trains, persistent problems in service and the notoriously deficient freight railway sweep him from his post. Several times Lutz had to compete at Federal Transport Minister Andreas Scheuer for rapport and promise the CSU politician to present a sustainable concept for the railway by summer.

That is now and bears the cumbersome name "strong rail", is 170 pages thick and defines the first time since the railway reform 25 years ago, a vision for the state-owned company. In industry, German would be the "Purpose" of the company. The concept should set the course for an unprecedented growth offensive of the railway. A green track, which pays on the climate goals of the government. But the "Strong Rail" project will also decide on Lutz's future.

ICE traffic in Berlin Central Station

The message: Concentration on the core business of railways, doubling of passenger numbers from now 148 million to 260 million, a dense Germany network with ICE and IC, one billion more customers in local transport, 70 percent more freight transport by the cargo subsidiary, 30 percent more capacity through Expansion of railways and digitization, 100,000 new employees, conversion of the stations into "hubs of modern mobility", 100 percent green electricity from 2038.

For this, tens of billions would be invested in new trains alone. According to the paper, the ICE and IC fleet is expected to grow up to 600 trains. Currently around 390 units are in use. Lutz wants to convince his supervisory board, but also the government, which has to co-finance his plan.

The railway boss wants to position the railways as the means of transport of the future in the face of the climate debate. "Only with a strong track are Germany's climate goals achievable," it says confidently in his paper.

Initial assessments in the Supervisory Board signal that Lutz still has to convince. "At last a paper that defines the meaning and purpose of a Deutsche Bahn" praise some inspectors. On the other hand, the strategy paper is too general, too little concrete.

Lutz is dependent on the goodwill of politics. He had to experience that in the last few meters to complete his paper. The train actually wanted to drive only with green electricity from 2050, now is the date in paper 2038th Here, the Federal Transport Minister directed. Lutz's plan to increase rail freight traffic from 18 to 25 percent now seems outdated. From the ministry it says 25 to 30 percent, and that by 2030.

First of all, personnel decisions are a sensitive topic. The plan to expand the Management Board from six to eight members and fill each of the core divisions of long-distance, regional and freight transport with an operational Management Board failed. Reason: On political pressure Sigrid Nikutta, now head of the Berlin transport company BVG, should move into the governing body of the railway. The resistance to the candidate was also great. Result: For the time being everything remains the same in the board of directors.

After all: Transport Minister Scheuer is now his railway boss. Lutz agreed the strategy with him in advance. But there are difficult to calculate risks.

What if the late-year delay does not come close to the already modest target of 76 percent? What happens if the rail freight company has to make billions in depreciation again? Who falls on the Dauerärgernis Stuttgart 21 on its feet, even if the reserve of half a billion euros now to be released by the Supervisory Board?

It applies the motto of the railway boss: "Who is depressed, should better not go to the train."

Financing: Why Arriva leaves and Schenker stays

This point is likely to be controversial to Richard Lutz 'plan. The foreign subsidiary Arriva is to be sold, but the logistics company Schenker not. At most, minority interests of investors are considered. The clear message in the strategy paper is that everything that is not part of the core business is put to the test. And "Arriva has little strategic relevance for the strong rail," they say.

Schenker is to remain because the company enables access to a "global logistics and customer network". Say: Schenker is to help freight transport by rail (DB Cargo) to contracts. However, the train has been waiting in vain since the purchase of Schenker 20 years ago.

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In the Federal Government, there are therefore controversial opinions on the participation plans of the railway. Because: What does not come in money through sales, is missing in the financing. Arriva should bring about four billion euros and would not even cover the additional needs of the quality offensive of five billion euros. For example, 110 million euros have been planned to provide customers with real-time information or 150 million euros for train maintenance.

The railroad itself is in a position to generate three and four billion cash flows annually for financing. But the investment needs increase to up to 14 billion euros in 2023. And the federal government is at best willing to increase 6.5 billion, according to the current state of negotiations. There remains only the flight into higher debts. The hitherto valid 24 billion Euro limit (including leasing debt) will be cracked this year with a high probability.

Freight: threatening depreciation

The rail freight subsidiary DB Cargo hangs over the railway company like a sword of Damocles. If Cargo does not make the turnaround this year, there will be millions in depreciation. Once again, in the 2015 financial year, Cargo tore the state-owned company deep into the red. Write-downs of 1.3 billion euros on vehicles and foreign investments were necessary because business expectations were not met.

Already in the 2018 Annual Report there is an indication that DB Cargo could once again have a depreciation requirement of € 300 million if the negative trend is not stopped. Railway insiders speak of far higher risks.

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DB Cargo has been losing transport orders for years, the Deutsche Bahn subsidiary is constantly being restructured, and a management change followed the next. A new production system was supposed to bring about a change, but the introduction in 2018 only meant that the railways lost even more orders. There are mutliple reasons for this. The system did not work as planned. In 2018, 5,300 trains ordered could not be driven. Wagons and staff were missing.

The start in 2019 was also unpleasant. Cargo lost 79 million euros in the first quarter. One of the biggest problems is the single wagon traffic. Here, individual waggons must be picked up at the customer, put together time-consuming to trains and again individually ranked at the terminal station to the customer. In contrast to complete container trains, which commute, for example, between Hamburg and southern Germany, this is not very efficient.

The result: While single-wagon traffic accounts for only 30 percent of cargo revenue of 4.2 billion euros, it accounts for the majority of losses. The railway can not stop the business for political reasons.

Long-distance traffic: building instead of driving

Rail travelers must once again have strong nerves this summer. The number of delayed long-distance trains will increase again in June and July by more than 25 percent. This is predicted by internal calculations. Reason are partly over 800 construction sites – per day. There are already blocked routes for rehabilitation works such as just Hanover-Würzburg in the timetable. That means: Trains are on the way longer, but it is not considered a delay.

The dilemma of the train remains for the time being. In 2018 and 2019, there will be more construction sites than ever, so that the trains can run more punctually later. At some point, the rehabilitation backlog of around 50 billion euros on the German rail network has to be processed once.

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Long-distance traffic continues to be the biggest nuisance of the state-owned company. Especially since staff shortage in trains as well as in the workshops meanwhile the second most important cause of the much-cited "delays in the operation" are. Although ICE and IC trains only account for about ten percent of Deutsche Bahn's consolidated sales, they are the figurehead.

This also explains why now alone a billion euros should be invested in long-distance transport to increase reliability and punctuality. At the same time, Deutsche Bahn is taking steps to repair a design flaw of the railway reform in a makeshift manner. So-called start-up teams with employees from various rail subsidiaries ensure that trains leave punctually at important railway stations. In the past, all of these railroaders had a common employer.

But even without construction sites and operational problems, the railway is facing turbulent times: 260 million passengers are to be transported soon, 30 percent more trains on the network run, the German clock will be introduced. Nobody names a specific target date as a precautionary measure. Nobody knows today how this planned storm on the railway should be organized. Especially since by 2030, half of all 190 000 railway workers will retire.

Vehicle procurement: trouble with the industry

The coalition government's requirement to double the number of passengers by 2030 poses a huge challenge to the railways. In figures, that means 260 million passengers alone in long-haul transport (compared to 2015), one billion more customers in local traffic. The number of seats is to be increased by up to 100 percent, according to the railway strategy paper.

The entire ICE and IC fleet may need to be increased to up to 600 units. The Railroad Board is even thinking about ordering a fifth-generation ICE with a top speed of 300 kilometers an hour. The current orders for long-distance trains alone cost around seven billion euros.

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However, the ambitious goals can only be achieved if the industry is involved. But you can not rely on them. Again, there is a problem with the parade train of the train, the new ICE 4. months ago, cracks were detected in floor vehicles, which are not relevant to safety, but led to an acceptance stop by the railway. 25 out of 119 ordered units are in use. The ICE 4 is supplied by Siemens, Bombardier builds parts of the vehicle.

Even the predecessor made headlines. Replenished trains arrived only two years late. The new double-decker IC from Bombardier went into operation with years of delay. Manufacturer, railway and the Federal Railway Authority make each other responsible.

But the track is causing big problems. New vehicles are urgently needed to cope with the rush of customers and to fulfill promises like this: 30 major cities are to be connected at half-hourly intervals. If the industry can not deliver on time, the train has to collect its announcements. New trouble is programmed.

More: The railway chief wants to make the group profitable again. Read here which strategy he pursues.

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