On the Wrong Track: Exploding Costs Threaten German Rail's High-Speed Future

The event last Wednesday was supposed to be a nice, pleasant occasion -- the sort of thing that the two speakers, Deutsche Bahn CEO Rüdiger Grube and Transportation Minister Peter Ramsauer, haven't had much of lately. They were in Berlin to select Germany's most attractive train station at a photography exhibition in the city's main train station.

The winners were Baden-Baden and Darmstadt, both in southwestern Germany. "As a rule, our train stations are clean and orderly," Ramsauer said. During his trips, the minister personally sees to it that everything is as pleasant as possible for passengers -- that the wastebaskets are emptied, the platforms swept, the underpasses well lit and the employees friendly.

And what about Stuttgart, asks someone? What about its central train station, a building on the historical registry, which many consider Germany's most attractive station?

There are currently ongoing protests in the city over a massive construction project called "Stuttgart 21" which will see the station redesigned and railway lines placed underground. It will also involve demolishing the north wing of the station, which is already being torn down despite attempts by local residents to save it. The project also involves the construction of a new high-speed line connecting Stuttgart to the city of Ulm, which will cut travel times between the two cities nearly in half, to only 28 minutes.

Even before demolition, the building was "too unattractive on the outside and too conservative on the inside," said Dirk Flege, who organized the contest with his lobbying group, the Pro-Rail Alliance. Grube and Ramsauer smiled thinly.

Growing Pressure

The massive and costly project has become a stress test, both for the German national rail company Deutsche Bahn and German transportation policy. If Stuttgart 21 fails, the entire strategy for the German rail network will have been damaged.

It is a strategy that emphasizes high-speed routes, no matter what the cost. It is constructed around European transportation axes like the routes from London to Warsaw and Copenhagen to Marseilles and, in the process, has allowed rail connections in less densely populated areas to atrophy. It is also a policy in which, for a long time, money was no object.

But now Deutsche Bahn CEO Grube is coming under growing pressure.

• A report commissioned by the Green Party, which was released Wednesday, concluded that the new construction on the Stuttgart-Ulm route will cost at least €5.3 billion, far more than the €2.9 billion that Deutsche Bahn had previously budgeted.
• The German Transport Ministry is conducting a reassessment of Deutsche Bahn's biggest development projects. If the ministry concludes that the cost-benefit ratio is worse than expected, the Stuttgart-Ulm line and other prestige projects could be given a lower priority.
• Major local transport and rail cargo customers are calling for a drastic change in direction. "In light of the foreseeable increases in traffic, we now need quick rerouting so that bottlenecks can be eliminated as fast as possible," says Hans-Joachim Menn, the head of the local-transport association in the state of Lower Saxony (LVNG).

Political Objective

Ever since Deutsche Bahn was founded in 1994 as a result of a merger between the former East and West German railway companies, it has been improving its rail network to comply with the political objective of increasing rail traffic. The national railway has already received €60 billion ($76 billion) in taxpayer money to fund the effort, spending more than a third of the money on new high-speed routes like the Cologne-Frankfurt and Nuremberg-Munich lines.

Nevertheless, the political target was not met. From 1994 to 2009, the number of passengers on national routes declined by 16 million to 123 million. Although there was an increase in freight traffic, it was insignificant. Only suburban and local traffic increased, thanks to hefty subsidies. And despite billions in federal money, the rail network became less and less comprehensive. Deutsche Bahn has closed a total of 7,579 kilometers (4,707 miles) of rail lines since 1994.

Does this mean that the goals of railway reform have failed? Should Deutsche Bahn renovate its low-density routes instead of sinking billions into the region between Stuttgart and Ulm?

Changing Priorities

The transportation committee of the German parliament, the Bundestag, met on June 9. Other parties attending the meeting were the national railway's major customers and competitors, representatives of local transport associations, private and freight railway companies, all of them organized within Deutsche Bahn's so-called network advisory council. These are the people who are most familiar with the strengths and weaknesses of the railway network.

The advisory council estimates the total cost of new and expanded routes that are under construction or approved to be €37 billion. This figure was included in the presentation material that LNVG head Hans-Joachim Menn distributed at the meeting.

If the federal government continues to provide about €1 billion a year in funding for these projects, the last of the projects will be paid for in 2043 -- a scenario that the experts consider to be unacceptable.

The advisory council has therefore made its position clear: There needs to be "a substantial reorientation" of government investments, it argues. The council believes that priority should be given to those projects that eliminate bottlenecks in the existing network and can be completed in a relatively short time. Menn and his colleagues are calling for politicians to take a reality check, instead of entertaining unaffordable visions for the middle of the century.

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• Part 1: Exploding Costs Threaten German Rail's High-Speed Future
• Part 2: Taking the Slow Train