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Success Factors And Pitfalls Of Regional Rail Franchising In Germany

Author

Listed:
  • Heike Link
  • Rico Merkert

Abstract

Since 1996 regional rail passenger services in Germany have been subject to franchising. The franchising framework is characterised by a strong decentralisation of responsibilities, a considerable degree of freedom for the responsible authorities regarding contract design, a sound financial basis for awarding contracts, and the free choice of authorities between tendering procedures and direct awarding of franchise contracts. This paper analyses the key outcomes of this franchising approach. We conclude that regionalization of responsibilities and franchising positively impacts on service provision, patronage, customer satisfaction, service quality and costs, in particular through better targeting of services. However, these positive outcomes could have been even greater if the failures in the institutional set-up, foremost the vertical integration of the DB group and insufficient regulation, were resolved. Overall, competitive tendering appears to bear further potential for additional cost savings and quality improvements, although for already competitively awarded contracts the improvements will not be as great as those from the first round.

Suggested Citation

  • Heike Link & Rico Merkert, 2011. "Success Factors And Pitfalls Of Regional Rail Franchising In Germany," Articles, International Journal of Transport Economics, vol. 38(2).
    • Handle: RePEc:jte:journl:2011:2:38:4
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    Cited by:

    1. Juan J. Montero, 2014. "Rail Transport: A Balance Sheet," EUI-RSCAS Working Papers p0413, European University Institute (EUI), Robert Schuman Centre of Advanced Studies (RSCAS).
    2. Christian Desmaris & Guillaume Monchambert, 2021. "Regional Passenger Rail Efficiency: Measurement and Explanation in the case of France," Post-Print halshs-03118747, HAL.
    3. Link, Heike, 2019. "The impact of including service quality into efficiency analysis: The case of franchising regional rail passenger serves in Germany," Transportation Research Part A: Policy and Practice, Elsevier, vol. 119(C), pages 284-300.
    4. Link, Heike, 2016. "A Two-Stage Efficiency Analysis of Rail Passenger Franchising in Germany," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 50(1), pages 76-92.
    5. Nash, Chris & Nilsson, Jan-Eric & Link, Heike, 2011. "Comparing three models for introduction of competition into railways – is a Big Wolf so Bad after all?," Working papers in Transport Economics 2011:19, CTS - Centre for Transport Studies Stockholm (KTH and VTI).
    6. Juan Montero & Matthias Finger & Teodora Serafimova, 2022. "Progressive tendering of regional railway services," RSCAS Working Papers 2022/61, European University Institute.
    7. Hunold, Matthias & Wolf, Christoph, 2013. "Competitive procurement design: Evidence from regional passenger railway services in Germany," ZEW Discussion Papers 13-009, ZEW - Leibniz Centre for European Economic Research.
    8. Christian Desmaris & Guillaume Monchambert, 2021. "Regional Passenger Rail Efficiency: Measurement and Explanation in the case of France," Working Papers halshs-03118747, HAL.

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