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DB celebrates 10 years of rail reform: this year marks the 10th anniversary of rail reform in Germany and the formation of a single national railway, German Rail (DB), serving a reunified Germany. The performance of the railway has been transformed and, despite a few recent setbacks, DB now looks forward to the start of privatisation next year.

Article Excerpt
RAIL reform came into effect in January 1994. The idea was being discussed in West Germany in the 1980s. But it was given added urgency with the fall of the Berlin Wall in 1989, followed by the collapse of the communist regime in East Germany leading to German reunification.

There were four key elements of rail reform:

* the merger of German Federal Railway (the old DB) in the former West Germany with German State Railway (DR) serving the former East Germany to create German Rail (DB) as a serf-standing company with all the shares held by the federal government

* the separation of the federal government's obligation to fund the national railway from the public and corporate obligations of the railway itself

* the transfer of responsibility for funding and procuring regional rail passenger services to the federal states, and

* the transfer of employees of the old DB who had the status of civil servant to either the new DB or a special federal railway assets (BEV) organisation which was set up to take over any assets not transferred to the new DB.

There were two key objectives of rail reform: reducing the financial burden of the railways on German taxpayers and transferring more traffic from road to rail.

The new DB certainly faced a daunting task on both fronts. The DR network in the former East Germany was in very poor shape. The infrastructure was dilapidated. In addition, about 70% of the network was single track and only one-third was electrified. In contrast, half of the DB network in the former West...