In the 7th Sector Report on the railway sector, published today and entitled “Better Quality and Competition on the Railways”, the Monopolies Commission sets out proposals on how the quality of rail transport can be improved. Regulatory measures can address the causes of delays and remove misincentives for DB Netz AG in relation to rail infrastructure maintenance. In particular, the Monopolkommission recommends:
Introducing liability for delays based on the principle of ‘the polluter pays’. Those responsible should bear the costs of the delays they cause. This applies in particular to the infrastructure operator DB Netz AG, which is currently not liable for the damage it causes. Compensation payments between DB Netz AG and the rail transport operators can encourage all market players to contribute to improved punctuality.
Introduce stronger quality incentives to maintain the rail infrastructure. The second follow-up agreement on the financing of the existing rail infrastructure between the Federal Government and Deutsche Bahn AG, which is currently under negotiation, should ensure that the use of funding is subject to stronger incentives for quality improvement. At present, for example, federal grants for rail infrastructure are awarded to DB Netz AG on a flat-rate basis. Performance is monitored on the basis of contractually agreed quality indicators. However, these do not adequately reflect the qualitative condition of the rail infrastructure. There is therefore a risk that DB Netz AG will not use the funding in accordance with criteria for sustainable and cost-effective infrastructure maintenance. For this reason, supplementary quality indicators should be agreed upon that accurately reflect the condition of the rail infrastructure.
Strengthening competition. In addition to regulatory measures to increase quality incentives, effective competition provides rail transport operators with their own incentives to improve quality. The German rail transport market continues to face a number of competition-related issues. In long-distance passenger rail transport in particular, competitors’ market share remains below one per cent. One reason for this is, amongst other things, high train path prices for rail transport operators. Although the new Railway Regulation Act introduced a regulatory framework designed to provide the infrastructure operator, DB Netz AG, with incentives to reduce its costs and, consequently, train path prices, However, the regulation is not realising its full potential, meaning that excessively high track access charges cannot be ruled out. In future, for example, the imputed capital costs of DB Netz AG should be based on its actual risk. This would effectively reduce costs and, consequently, track access charges.
Separate infrastructure and operations. Effective competition requires the infrastructure operator to be independent. The separation of transport companies from the infrastructure operators within the DB Group should therefore be further pursued.
