A short time ago, I supported the theory that state companies, and perhaps even monopolistic state companies, may not be a bad solution. If they meet certain requirements, they can even be more productive, efficient and customer-oriented than private enterprises. This article of mine instigated an exciting discussion.
Consequently, I will now discuss two items of news from the press on this same subject.
Firstly, I recently read that fewer and fewer interested parties can be found as bidders for regional railways. And that those who are in charge (state administration – it would be interesting to know who exactly that is and why) would be happy to hand the contract directly to an interested party without the bidding procedure. However, because of a Federal Court Decision, they are not allowed to do so.
I am not surprised. From personal experience, I know how much you have to invest if you want to bid in a public bidding process. As a general rule, the cost is nowhere near what you might eventually gain in turnover and result generation.
Especially since the final decision gets more and more uncertain and winning the bidding process gets less and less likely for decent companies. More and more bidders make an offer far below their actual cost, because they absolutely want or need the contract for some reason or other. At least that is the situation in the IT sector – for “strategic reasons” winning the bidding process is literally bought.
In the “Süddeutsche”, you could also read something interesting about the future bidding process for the “operator of the Munich S-Bahn”. If someone new wins the bidding, they will have to take over the rolling material of the old operator. Initially, this came as a surprise to me. After a little consideration, however, it sounds absolutely logical. Regardless of it basically being nonsense.
Let us assume a new bidder wins the operating rights to the Munich S-Bahn. If he has to take the old trains, he will have no chance of ingratiating himself with the users by using better and more modern vehicles. Maybe with structured first class. Or toilets in those trains that go longer distances (from Kreuzstrasse to Wolfratshausen, the train takes one hour and thirty minutes).
Nor can he shorten the intervals between trains. The same is true if he wants to change anything in the network (for instance more meeting points on one-track lanes or new two-track lanes). A future bidder also cannot come up with a new ticket price concept, since he will probably have to use the old ticket machines, cancelling machines and other logistics. Basically, he can offer the same as is offered now, with marginal changes or improvements. If he wants to make more profit, there is only one way to do it: charging the passengers less. And that is identical with less costly employees (or with fewer).
So what happens to all the employees who drove the trains for the old operator? Will they have to go to the new winner of the bidding? For less income? Presumably (and naturally) that will not be possible – due to labour legislation and job protection.
So where is the new operator supposed to recruit the people who are to drive the trains? We already saw what happened with regional coach lines. The new operator was less expensive because he managed to employ his coach drivers as sub-contractors and pay them less.
As I see it, there is a lot in this new concept of privatizing with operation and bidding that is less than thoroughly thought through. I would prefer a strong, integrated system. A shared venture that will not have to balance from bidding to bidding, but can instead make public transport more punctual and comfortable through a truly continuous improvement process, integrating the railroad network, transport and logistics. One that can also decide and realize the margin dimensions, such as reasonable prices and a simple paying system.
This, however, cannot be done with the current privatization model. What is worse: the bidding will not end with the best offer, but with the most cunning one. Which will not make public transport any more attractive. With negative consequences for our environment and our future.
And if they defend the concept, reasoning that the railway will be more efficient after privatization and consequently make a profit, instead of the loss the old “Deutsche Bundesbahn” made, then this, too, looks like thin ice to me. Today, the regional operators only start after they have been paid for by the communities. And I get the impression that what used to be called “loss” is now the active subsidies they get from the public administration.
But privatizing also caused something else: it seems to me that the new owners are even bolder with higher ticket prices than the former state companies were.
RMD
(Translated by EG)
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