We all know that the rail industry isn’t exactly renowned for attracting positive media coverage in the national press. But this was the case last year, when we announced National Express’s first successful foray into the German rail market. While The Sun’s language was predictable (‘Bahn Storming…National Express scored a huge away win’), the message behind it was revealing. The stereotypes are so ingrained that, for a British transport company, continental success is seen as surprising rather than something we should be striving for.
But this shouldn’t be the case, because the European rail market has real potential for British companies who are willing to adapt to a different approach. Germany is Europe’s largest rail market, with contracts totalling around €12 billion coming online in the regional rail market. Deutsche Bahn remains the dominant player today, with the long-distance market largely sewn up and around 75 per cent of Germany’s short-distance market. But this is set to decrease by at least 10 per cent in the next few years as around 100 contracts will come up for tender – there is a lot of opportunity ahead. National Express may have been the first UK company to have won a competitive franchise bid in Germany, but we won’t necessarily be the last.
UK competitors have to be prepared for marked differences in the German franchise system. There is no DfT equivalent, no central authority with a strategic overview letting the majority of franchises and making a succession of tweaks to the framework from competition to competition. Instead there are 27 different regional authorities – equivalent to our Integrated Transport Authorities – each of whom has their own unique rules and regulations for their competition. Never has it been so important to understand what your client wants – a one-size-fits-all bid model certainly doesn’t work in Germany.
The two contracts National Express has won so far are for the Rhine-Münsterland Express service (RME) in North Rhine-Westphalia, Germany’s most populous region. We will be operating the Rhine-Münster-Cologne-Krefeld regional express service, and the Bonn-Cologne-Wuppertal stopping service. The letting process involved three different local authorities, with Dusseldorf leading the competition but the transport authorities for the Rhine and Münster area, and the Cologne and Bonn area, also represented. Developing a close relationship with each of the clients involved was crucial.
One result of the number of franchising bodies is that the size of each franchise is small by UK standards. Each of the RME services we will run is around half the size of National Express’s c2c operation – itself one of the smallest UK franchises, though we all know small really can be beautiful.
Our German contracts both last for fifteen years, again a rarity in the UK but a feature we have had great success with on c2c. This offers huge potential for investment that delivers real passenger benefits, and quickly.
Be prepared to invest
And you do have to be prepared to invest. There is rarely any transfer of assets from DB – new staff have to be recruited, trains financed and even depots built from scratch. This means a necessarily long, and very busy, break between contract award and the start of operations. It’s more than 18 months since National Express was awarded the RME contracts, and we’ve still over a year to go until we run our first services.
As every train operator knows, ultimately you will be judged on the quality of your service. That’s why National Express’s success with c2c – turning a failing commuter operation into the UK’s most punctual railway – has been a real calling card for us in this new market. Some of the pledges we’ve made in the new c2c franchise, such as promising to start compensating passengers for each minute they are delayed, rather than giving ourselves a half-hour leeway, have really caught the imagination.
More markets opening up
This is good news for the UK’s international reputation. When Transport Secretary Patrick McLoughlin was in Berlin at InnoTrans recently, I was proud to be able to brief him on how our UK performance has boosted our future prospects. It was also a real privilege to show off the model of the new ‘Talent’ train that National Express has commissioned from Bombardier for the RME services.
So I believe flexible companies with a record of delivery really can prosper on the continent. More markets are opening up – the Czech, Spanish and Portuguese railways are all set to liberalise. Who knows, with time British transport companies can become so successful abroad that even The Sun might run out of puns for its headlines.
Andrew Chivers is managing director, Rail, National Express Group