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Kick-Off Workshop March 2nd, 2005 in Ankara. The Process of the Railway Reform. Rolf Heine President Federal Railway Property Agency (BEV). Rolf Heine, Ankara, March 2nd 2005. Tasks at hand: Implementation of the requirements contained in Council Directives and Regulations of EU
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The Processof the Railway Reform Rolf Heine President Federal Railway Property Agency (BEV) Rolf Heine, Ankara, March 2nd 2005
Tasks at hand: • Implementation of the requirements contained in Council Directives and Regulations of EU • Having regard to the particular national needs in the field of politics, society, transport, finance, environment etc. • Germany has many years of experience in successfully restructuring of the rail sector • We would like to build our advise to Turkey on some of the lessons we have learned in Germany
Political key issues in Germany: • Railway reform by reshaping the relationship between Railways and the State • Privatization • Acceleration of planning • Harmonization „Ensure mobility in line withenvironmental needs“ by Rolf Heine, Ankara, March 2nd 2005
Main targets restructuring railways • Implementation of the requirements contained in Council Directives of EEC • Transform DB/DR into a group of competitve and financially-viable enterprises • Higher share of the railways in the traffic growth • Reduce, to the maximum extent, the financial burden on the German State caused by the railway Rolf Heine, Ankara, March 2nd 2005
Activities of Government and Parliament • Approval of the bills for the implementation of the railway reform by the Federal Government with a 2/3 majority of both houses of parliament (Bundestag and Bundesrat), due to constitutional changes • Main Piece of legislation: Railway Reform Act with 6 main Articles: • Art. 1: Federal railways unification and restructuring act • Art. 2: DB plc foundation (creation ?) act • Art. 3: Federal Railway Administration Act • Art. 4: Public transport Regionalisation act • Art. 5: General Railway Law • Art. 6: changing of 130 other laws Rolf Heine, Ankara, March 2nd 2005
How to manage separation Railways/State • In the field of State • In the field of Railways Rolf Heine, Ankara, March 2nd 2005
Area State (1) • Laying down of the infrastructure and public service obligation in the Basic Law • Safeguarding of the majority share of the Federal Government in the Infrastructure Corporation (Basic Law) • Definition of the responsibility for the infrastructure (financing of network investment) in the Law on the Development of the Railway Infrastructure Rolf Heine, Ankara, March 2nd 2005
Area State (2) • Regulation concerning the abandonment of railway lines • Regulation concerning the transfer of local lines • Conversion of the Railways into a stock corporation Rolf Heine, Ankara, March 2nd 2005
31 December 1993 01 January 1994 Special fund Deutsche Bundesbahn Special fund Federal Railway Property Agency Special fund Deutsche Reichsbahn Steps Railway Reform (1) Rolf Heine, Ankara, March 2nd 2005
05 January 1994 • Federal Railway Property Agency- Administration area • - Business area • Sovereign area BEV DB AG EBA Steps Railway Reform (2) Rolf Heine, Ankara, March 2nd 2005
Sovereignty of BEV • Outward sovereignty means: • Legal capacity, active and passive legitimation • Organizational independence • Separate budget • Not the traditional position of an authority(not directly subordinate to the Federal Ministry of Transport, Building and Housing) • Acts outwardly in legal relations under its own name Rolf Heine, Ankara, March 2nd 2005
Federal Railway Authority (EBA) • Part of the MoT budget: • Technical supervision • Plan determination • Statement of Vice-President EBARalf Schweinsberg:„Necessary Bodies and Institutions“ Rolf Heine, Ankara, March 2nd 2005
Tasks of BEV • Personnel management for • Civil servants in the DB Group(assigned and granted leave of absence) • Civil servants with third parties (granted leave of absence) • Transfer of services to third parties • Recipients of state benefits • Own personnel • Continuation social services • Administration and utilization of real property Rolf Heine, Ankara, March 2nd 2005
Real Estate CompanyVivico Real Estate GmbH • BEV (94,99 % shareholder) • 218 valuable objects in exposed locations • Own responsibility for added value • Privatisation in 2 phases • Examination • Transaction Rolf Heine, Ankara, March 2nd 2005
Commercialisation of the BEV Real Estate • Legal remit of BEV(property required / not required by the railways) • Agreed and final breakdown • Real estate stock of BEV(Residential, sports, leisure time areas, commercial objects) • Commercialisation of the objects expected by 2011 • Receipts of Vivico and BEV Real Estate are contribution for the financing of railway infrastructure Rolf Heine, Ankara, March 2nd 2005
Other Federal Government Subsidy BEV BEV Pensioners Other Civil Servants at DB AG DB AGfor Civil servants Federal GovernmentInvestment Track Vivico Real Estate DB AG Investment Track Capital flows (Area State) Rolf Heine, Ankara, March 2nd 2005
Area Railways • A fresh start without debts and historical burdens • An extensive relief from depreciation expense for the DB AG • The possibility of improving the results by higher profits and lower expenditure and of creating a stock corporation rununder commercial aspects Rolf Heine, Ankara, March 2nd 2005
Area Railways (1) • Financial improvement measures • Balance sheet adjustmenteffect: reduction of depreciation • Reduction of indebtednesseffect: reduction of interest burden • Taking over of the additional charge from the productivity backlog of the DReffect: reduction of material and personnel costs Rolf Heine, Ankara, March 2nd 2005
Area Railways (2) • Financial improvement measures • Taking over of the investment backlogdemand of the DReffect: reduction of interests and depreciation • Release of the DB from the civil service pay regimeeffect: reduction of personnel costs Rolf Heine, Ankara, March 2nd 2005
Still requirements for action? • Railways • Better use of existing potentials • Consistent market orientation (new markets) • Technological development of rail system • Cost reductions Rolf Heine, Ankara, March 2nd 2005
Still requirements for action? • State Institutions today • Partner of the DB Group • Partner of other investors and owner, e.g. • Vodafone (Arcor AG & Co.) • Utility Company Konstanz (Bodensee Shipping) • Scandlines • and others Rolf Heine, Ankara, March 2nd 2005
Still requirements for action? • State Institutions in future • One-stop product „railway reform“ • Partner also for new structures and ownership situations Rolf Heine, Ankara, March 2nd 2005