Connex Verkehr GmbH 27. Agustu Connex passenger rail activities Private Rail in Germany: The Example of Connex

Connex Verkehr GmbH 27. Agustu Connex passenger rail activities 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

Connex Verkehr GmbH 27. Agustu Connex passenger rail activities 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

Connex Verkehr GmbH 27. Agustu Connex passenger rail activities 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

Connex Verkehr GmbH 27. Agustu Connex passenger rail activities 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

Connex Verkehr GmbH 27. Agustu Connex passenger rail activities 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.

Connex Verkehr GmbH 27. Agustu Connex passenger rail activities 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

Connex Verkehr GmbH 27. Agustu Connex passenger rail activities “Regionalisation” Financing of the deficit in regional rail until 1994: / Federal government Bundesbahn/ Reichsbahn Simple balancing of the whole deficit

Connex Verkehr GmbH 27. Agustu Connex passenger rail activities “Regionalisation” Financing of regional rail from 1995: Federal Government Regionalisation funds (ca. 7 Mrd. Euros/year) Federal states =„orderer“ Train operators:... and ca. 30 others

Connex Verkehr GmbH 27. Agustu Connex passenger rail activities “Regionalisation”: Goals: 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

Connex Verkehr GmbH 27. Agustu Connex passenger rail activities Results of Regionalisation (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 %)

Connex Verkehr GmbH 27. Agustu Connex passenger rail activities Results of Regionalisation (2) When tendering regional rail, the states/PTAs have realised savings of % - at the same or even better service level. Some lines could be saved from closure and successfully revitalised

Connex Verkehr GmbH 27. Agustu Connex passenger rail activities Connex in the regional rail market Ca. 700 employees 7 subsidiaries 2 long distance trains 1612 km line length 19,2 Mio. train-km Diesel railcars 3 conventional trains with loco 248 Mio. Euro turnover 2003 (excl. rail cargo, incl. bus) Turnover 2004: 336 Mio. Euro

Connex Verkehr GmbH 27. Agustu Connex passenger rail activities Connex in the regional 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

Connex Verkehr GmbH 27. Agustu Connex passenger rail activities 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 brands with Connex co-branding Joint ventures with municipally owned transport companies are possible:

Connex Verkehr GmbH 27. Agustu Connex passenger rail activities 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

Connex Verkehr GmbH 27. Agustu Connex passenger rail activities 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 seats Alstom LINT (38) Siemens Desiro (18)Bombardier Talent (53)

Connex Verkehr GmbH 27. Agustu Connex passenger rail activities The rolling stock of Connex Three conventional trainsets, consisting of electric loco (class 185) and 4-6 refurbished express train cars (140 km/h)

Connex Verkehr GmbH 27. Agustu Connex passenger rail activities The rolling stock of Connex From Dec 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)

Connex Verkehr GmbH 27. Agustu Connex passenger rail activities 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

Connex Verkehr GmbH 27. Agustu Connex passenger rail activities Thank you for your attention!