Books

Derailed

Deraile d: What Went Wrong and What to Do About America's Passenger Trains.
by Joseph Vranich. St Martin's Press 1997. 258 pages.

Mr Vranich's book is a detailed yet lucid account of why and how America has such poor passenger rail service. Antiquated, absurd laws, and a deeply jealous Amtrak stifle innovative non-Amtrak initiatives, and no government is determined enough to break this fortress of mediocrity. Mr Vranich's book came out in 1997, before Congress gave Amtrak untill 2004 to become self-sufficient. If Amtrak succeeds, it will be partly due to Mr Vranich's wake-up call.

Mr Vranich worked to create Amtrak and was a spokesman for the company. His second book gives us a personal, first-hand account of how passenger rail has developed in the USA in the past 30 years. He also shows how different organisations and people have acted to shape passenger rail today. He alleges that Amtrak has transmogrified from a company aimed at saving passenger rail, into a self-serving Washington lobby which will sacrifice sensible passenger rail projects in order to survive itself.

Amtrak Allegations

Amtrak's poor reputation has locked it out of involvement with any of the new entrepreneurs hawking high-speed rail projects or luxury "land cruises" by train. Knowing that a private success story would seriously undermine efforts to finance Amtrak, Amtrak officials sought to outmanoeuver the new guys in order to secure its near-monopoly on rail money.

This is a very serious allegation, and Mr Vranich's personal involvement in the passenger rail industry has perhaps made him somewhat biased and even hardline in his views.

A key part of Amtrak's failure is not its own fault. Mr. Vranich does not mention the irregular funding Amtrak has recieved, nor that Amtrak officials have publicly said that a lower but more constant and predictable flow of congress money would have been better. A properly financed operation would have attracted more talented and motivated employees.

Mr Vranich is also very enthusiastic over anything that is not Amtrak. He supports maglev as a sensible high-speed initiative. In the aftermath of the failure of the German Transrapid consortium, this seems starry-eyed. But the book is from 1997, when maglev looked a little more realistic. Even after 30 years of research and development, maglev people have not been able to identify and serve a need in the transport market. Lufthansa Airlines' departure from the Transrapid consortium after the airline's privatisation speaks volumes about the viability of maglev.

Despite his anti-Amtrak bias, Mr Vranich builds his skepticism on a thorough knowledge of passenger rail in the US. He goes into considerable detail to show how Amtrak has used questionable methods to discourage private high-speed rail projects in Florida and Texas.

If an Amtrak supporter were to read his book, there's a good chance that he will be converted to a "rail liberal". From several points of view, Vranich drives home the point that killing Amtrak is not the same thing as killing passenger rail.

He also points out that though many long-distance trains are quaint, they don't make money and people aren't prepared to pay what it costs to ride them. Therefore they aren't part of the future (or the present), but this is an emotional point which might not stick regardless of which arguments are made. Vranich makes a good stab at it though, especially by showing that the long-distance trains are mostly used by retired people with money and time. The subsidised trains actually cater to an upscale market.

Mr Vranich also pokes a hole in Amtrak's Acela hype, noting that given the Northeast Corridor's population density and potential, it's quite pathetic that a big upgrade project in a dense and rich corridor like the NEC, in this day and age aims at trains reaching 250 km/h, and averaging much lower speeds.

Lax Legislators

Apart from the comprehensive criticism of Amtrak, Vranich also details the absurdities and anachronisms of American rail law, and the timidity which governments show in changing them. Vranich says that the Texas TGV died because safety regulations for fast trains weren't in place, and didn't seem to be on the way. A special waiver would have to be obtained to run trains faster than a piffling 180km/h. Under such uncertainty, not enough peope were willing to invest enough money in the poject.

Labour law is another area where government remains stuck in the 1800s. Railway workers get six years of severance pay if they are layed off after a line closure, and they have been employed at that railway for six years or more – effectively a two-for-one deal. This law alone makes it harder to dispose of unprofitable lines and start with a clean slate.

A railway injury compensation law requires workers to prove they are not at fault before they are compensated, whereas in other industries, employees are automatically compensated unless the employer can prove they aren't to blame for the accident. Vranich says that this backward burden of proof causes mistrust between management and labour, as well as increasing legal costs. The law also makes potential rail partners and investors think twice since this railway law differs from the general workers' compensation laws covering the rest of the US workforce.

Mr Vranich also wants states to give right-of-way to high-speed rail projects for free as this is done for airports and highways.

Thorough

Mr Vranich's thorough knowledge of his subject is apparent on every page. He has thought a lot about the subject, and the book is the result of this long-term involvement rather than a short-term research project.

April 2000. Review by Erik Sandblom /Erik's Rail News

Bestandsaufnahme Deutsche Bahn

Bestan dsaufnahme Deutsche Bahn. Das Abenteuer einer Privatisierung by Lothar Julitz, journalist covering rail issues for the Frankfurter Allgemeine Zeitung. The book covers events up untill 1998 and details how and why Germany decided it could no longer mix politics with business.

The Story

By the end of the 1980s, the Deutsche Bundesbahn had become a dinosaur and the subsidy requirement was accelerating. The merger with Deutsche Reichsbahn in the east posed another challenge. It was determined that the railway desperately needed to make its own decisions based on commercial realities rather than political issues. So, the two government railways were converted into a holding company with subsidiaries in the form of limited companies for intercity, suburban and freight services, plus one for infrastructure. The subsidiaries are meant to be "profit centres" and cross-subsidization is not on the agenda. The goal is to transform each subsidiary into a limited company (Aktiengesellschaft) and to sell the holding company on the stock market sometime in the new millennium. All of DB's debts were taken over by a government agency.

But DB AG, like any other European railway, is far from independent. Suburban services are heavily subsidized; the provinces determine the services required and then put them out to tender. This is not expected to change. DB AG has won most of these tenders. For the modernization of the eastern railways, DB AG gets a special subsidy which is reduced annually, and will be phased out in 2002.

In contrast to reforms in Sweden and Britain, the emphasis in Germany has been on the legal framework for the enterprise, rather than on introducing competition. DB Netz, the German answer to Railtrack and Banverket, is actually 100% owned by DB AG itself which is the dominant train operator. The only framework for direct competition in Germany seems to be the 91/944 EU directive (seperation of accounts for infrastructure and operation) which has proven very toothless. The only difference in policy between the infrastructure unit and the others is that the majority of shares must be owned by the government; the other subsidiaries may be entirely privatised.

Railtrack is regulated and privately owned; Banverket is a government-financed agency responsible for investments and maintenance of the Swedish railways. Banverket also runs the traffic control, which among other things is in charge of questions of priority when trains are delayed.

The Book

Mr Julitz starts his book with a lot of hype which apparently reflects a general mood of reboot in the German rail sector. This serves as an excellent introduction into the thinking behind the reform, and the goals set out for it. However, one gets dissappointed when numbers are yanked from their context and displayed in an effort to impress. As a whole, the book does detail year-by-year progress in kilometres, tonnes, passengers and deutschmarks, but all too often the reader is expected to be gee-whizzed by an impressive number which does not have a counterpart in another year, or indeed any comparison at all. Also, it's no fun to have to flip pages in search for a comparison.

This matter may seem trivial and of interest and only to number-crunchers, but let's face it: the reform is all about numbers. It's the bottom line that is the whole issue.

Some interesting numbers appear nonetheless:

• Regional transit contributed DM11m in revenues to DBAG in 1997; roughly a third of total revenues. Of this third, one third came from ticket revenues, and the rest from government purchasing. (page 81)
• Half of DB's freight tonnage and a third of freight revenue comes from the mining industry. (page 86)
• A slump in freight revenue in 1996 was partially due to shifting requirements from the power generation industry, such as more natural-gas fired plants in the east. But the slump couldn't be compensated by increases in transport of manufactured goods, chemicals, and steel products. This points to an inability to compete with trucks. (page 91)

While Mr Julitz obviously supports the reform and finds it a qualified success, a ten-page chapter is dedicated to critics of the reform and what they have to say. Also, pros and cons are noted throughout most of the book.

But this book is not just about politics. Half of it details everyday aspects of the German railway, such as

• safety issues
• union issues and union participation in the reform
• the innovative Jugend-Bahnhöfe where a team of young employees learn a can-do entrepreneurial attitude by running a small railway station
• the trials and tribulations of attracting more bimodal business, and working with relevant partner companies
• different government agencies
• increasing line capacity with modern signalling systems and separating slow traffic from fast

The level of German is not insurmountable for those with high school level German, an interest in railway reform, and a German-English dictionary. Mr Julitz sometimes uses many words to say few things; this makes the text easy to follow but sometimes is just irritating. If you know German, and if you are interested but not entirely familiar with German rail policy, this is an excellent book.

326 pages. Buy this book at Amazon.de.

Link: DB AG on the reform: Die Bahnreform

May 15th, 1999. Review by Erik Sandblom /Erik's Rail News