Network 21: impact on rail freight traffic

Following the rail reform in Germany, Deutsche Bahn remained in the ownersh ip of the German State but the company was divided into a number of subsidi aries, including long-distance and regional operators and DB Netz AG, the i nfrastructure manager. This market-driven organization is obliged to recove r completely the costs of infrastructure provision by levying utilization c harges (principle of full cost coverage). Hence, the market conditions of r ailway undertakings, such as those providing rail freight services, are at least partially determined by the level of costs of providing the infrastru cture. The current high level of costs at DB Netz AG must be significantly reduced if the railways are to hold their own against intense competitive pressure from road and waterways. It will not be possible to achieve this goal pure ly by continuing with on-going rationalization measures and additional inve stment in the track infrastructure (new and upgraded lines). Both the rail reform goal of switching more traffic to rail and the purely commercial int erests of DB Netz AG necessitate a comprehensive increase in productivity a nd enhancement of product at realistic market prices. In order to achieve these objectives, DB Netz AG chose a novel form of netw ork management which relies strongly on the separation of traffic flows of different types. This was defined as the Network 21 strategy. The Network 2 1 strategy will also enhance the ability of operators to deliver both passe nger and freight services in a more timely manner.