Rail Infrastructure Charging and On-track Competition in Germany - 9 Years Later



Rail Infrastructure Charging and On-track Competition in Germany - 9 Years Later

Authors

H Link, German Institute for Economic Research (DIW), DE

Description

Abstract

Rail infrastructure charging and on-track competition has meanwhile a 9 year's history in Germany. In 1994 the rail network of Deutsche Bahn (DB) was opened up for third parties against payment of access fees. Although a number of non-DB companies operate services at DB-tracks the share of train-km they run there is still low. The main reason for this is the institutional framework: It does not imply any regulation on the incumbent company DB which provides the tracks both for own services and for the services of the competitors. The responsible bodies for competitor's claims are the federal antitrust commission or against the federal railway office (Eisenbahnbundesamt - EBA). Both the antitrust commission and the EBA have only passive regulatory power, e.g. they can only react on the basis of received claims but are not entitled to active market regulation.

During the last 9 years DB had to revise the access charging scheme already four times. The first price system for track use was introduced in 1994, followed by a price list for the use of stations in 1995. The first revision of this scheme was in 1995 (reducing discounts which clearly favoured the DB companies), a second more fundamental one followed in 1998 ( change from a one-part tariff to a two-part tariff consisting of a fixed charge and a variable part per train-km), a third one in 2001 (return to a one-part tariff after competitor's claims against the federal antitrust commission) and a fourth revision/amendment started in 2003 (introduction of regional surcharges on top of the access charges). Against the background of several complaints on discrimination of non-DB track users and abuse of monopoly power by the vertically integrated incumbent company DB the full institutional separation between track provision and train operation has been requested and has been extensively debated. Finally it was that the track company DB Netz will remain in the DB Holding together with DB's transport companies. In order to guarantee that non-DB users are not discriminated, a new law on network access and access regulation foresees a so-called track agency which will observe network access, as well as several other measures aiming at providing better framework conditions for DB competitors. However, the main problem of a still vertically integrated incumbent company remains unsolved.

This paper analyses the institutional framework conditions for network access and on-track competition from the point of view of economic theory and compares this to the current situation in Germany. Due to the fact that DB does not release any information on the number of competitors on DB tracks and on the train-km driven by them, own data collection and interviews are used to update earlier studies of the author on the degree of on-track competition. The paper will in particular identify the obstacles for market entry of new rail companies and will draw conclusions for the necessary regulatory framework.

Publisher

Association for European Transport