October 98

Grand Russian Plans Scuppered by Crisis

At least 76 freight trains were stuck on an eastern stretch of the Trans-Siberian railway on Monday the 26th after the local electricity company cut off the power for non-payment of bills. (October 29th)

The Russian Railways have suffered a 15% fall in freight volume and a 30% fall in revenue since the devaluation of the ruble in August, The Journal of Commerce reports. Rates will be slashed by up to 25% for many freight types, to adjust to the market. This is apparently on top of a controversial set of substantial cuts announced in April.

Also in Russia, projects were announced last spring to raise the speed of freight trains to 100 mph or 160 km/h. This would apply on two routes westward from Nizhni Novgorod and Moscow, to St Petersburg / Helsinki, and Warsaw / Berlin. Also, the Trans-Siberian is being modernized. The aim is to provide transit times 40% lower and prices $450 per container less than the sea route. (October 23rd)

Adtranz & Siemens CEOs fired

Kaare Vagner, the boss of Adtranz, has left his position as CEO, it was announced on Thursday the 15th. Jürgen Schremp, CEO of Daimler-Benz, of one of Adtranz' two owners, says that "Our patience with Adtranz is exhausted". However, it is not clear if Mr Vagner's departure will result in any change of course at Adtranz. Mr Rolf Eckrodt will temporarily take over Mr Vagner's duties. Eckrodt comes from Adtranz' troubled German division, which has seen some of the deepest cutbacks in Adtranz' two-year history. (Earlier this year, Adtranz Germany announced that one quarter of employees were to be let go.) Eckrodt may also end up being Vagner's permanent successor.

Vagner is thus following in the footsteps of his collegue Wolfram O. Martinsen at Adtranz' biggest competitor, Siemens Vehrkehrstechnik. He also lost his job in August due to his company's poor performance. Manfred Bischoff, from Daimler-Benz Aerospace, will be appointed chairman of the board of directors, the Stuttgarter Zeitung says.

The German division has been doing poorly compared to other regions, despite the German Railways' huge orders for new high speed trains, freight and passenger locomotives, and other new material. Adtranz' troubles are commonly blamed partly on a glut of railway equipment on the world market, but also on a failure to meet cost-cutting targets. The German division sold many trains on the assumption that they would be able to streamline their production. However, the expected savings failed to materialize, and the contracts turned into liabilities.

Also see story in English at the Financial Times. (October 19th)

Transrapid in Doubt

Federal German Transrapid-money will be re-chanelled towards the building of a coastal highway, the A20, if the maglev from Hamburg to Berlin gets scrapped. This is the policy of the new red-green government of the Mecklenburg-Vorpommern region. The policy of the likewise red-green federal government is to build the maglev, if the costs to not escalate past estimates from 1997. The Transrapid consortium, consisting of among others train maker Adtranz and steelmaker Thyssen, says it will absorb cost overruns arising from the trains and technology, but not the right of way.

The German transport minister says the Transrapid may be saved by a different and cheaper right of way. (October 25th)

Alusuisse is building the shells for the German Transrapid, due to start service at up to 500 km/h between Hamburg and Berlin in 2005. Alusuisse says it is the only company in the world that can make the shells strong, light and cheap enough. (October 16th, thanks to Steve Wiedmer)

Short Bulletins

Bombardier is developing a non-electric locomotive for speeds up to 150 mph, or 240 km/h. (October 29th)

Austrian ÖBB has won a deal to transport 18 000 containers per year for Chrysler Corporation from Rotterdam to the Chrysler factories in Austria. These containers were previously transported by a consortium around German DBAG. (October 23rd)

DBAG will not see any fall in revenue this year, despite the tragedy in Eschede. Revenue was back to normal in July, only a month after the accident. But profits fell for 1998. (October 23rd/25th)

The Betuwe Route through Holland has become a politically infected issue. The project consists of a new dedicated freight railway from Rotterdam to Germany. However, eight professors have released a paper questioning the need for the railway in light of the increasing efficiency of the canal system. They also dispute the notion that a capacity of 30 million tonnes will be necessary by 2010. The Port of Rotterdam retorts that it will generate that much rail traffic by 2010 on its own. (October 23rd)

FT.comEurotunnel's "Shuttle" trains are gaining market share over the competition, the latest quarterly statistics show. But the Eurostar trains show falling passenger numbers. Press Release. Also, the Channel Tunnel Rail Link is to receive a £200 million loan from the European Investment Bank. (October 23rd)

A freight and a commuter train collided in Grellingen, Switzerland, collided on Wednesday the 14th. The commuter train, coming from Basel, was tipped over by the freight. (October 14th, thanks to Steve Wiedmer)

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