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Old January 10th, 2012, 04:49 PM   #1201
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How can you qualify transport as a non-essential economic activity? There is no trade at all without it and trade is the basis for achieving the low marginal costs of production that has allowed our current high standards of living! Even if we just talk about passangers the mobility of human capital is extremely important to reduce labor market distortions.
Transport is not going to cease its existence in Germany if DB was dismantled and its assets sold, in parts, to different bidders. Germany would only lose the concept of a system operating as a "network", and would have to adjust to new realities (no more trains leaving Frankfurt to Stuttgart every 12 minutes past the hour). But we'd see, likely, lower prices.

A precedent: air transport, once organized in networks with the excuse of the need of central coordination and good use of the public resources sunk on runways, and the need to provide fairness with accessible fares to different parts of the country. And we can all fly nowadays because it is so cheap...
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Old January 10th, 2012, 04:51 PM   #1202
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The underlying question is whether one thinks competition, like democracy, freedom of speech or freedom religion, is a value justified on itself, regardless of other implications, or just a mean to achieve something else. I belong to the first camp when it comes to competition in economic activities that are non-essential (like transport).
To people who really know the meaning of freedom and democracy the principle of "no taxation without representation" is self evident.
From that follows that when infrastructure gets built with tax payers' money, the tax payer has a right (via his representatives) to exert a certain level of control over it.
In other words, if my government uses my money to build some high speed railway line, I want it run in a way that maximizes value to myself. And I want my government to make sure that this happens.
Even if that means that private companies cannot maximize their profits. Nowhere is it written that the producers are solely entitled to the entire economic surplus.
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Old January 10th, 2012, 07:32 PM   #1203
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But we'd see, likely, lower prices.
Considering DB crossfinances its long-distance public transport (non-subsidized) from profits in its short-distance public transport (subsidized) i doubt that'd happen. Especially since we'd pretty quickly have an oligarchical system forming, much like what already happened in cargo rail transport in Germany.

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The underlying question is whether one thinks competition, like democracy, freedom of speech or freedom religion, is a value justified on itself
With regard to what you're proposing there's a certain single line in the German Constitution:

Property obligates. Its use shall serve the common good.

Handing off public property - and the use of a railway line built with state money is such - to select private entities in order for them to profit from it would be a violation of the above. Pretty simple actually, isn't it?
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Old January 10th, 2012, 07:36 PM   #1204
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Handing off public property - and the use of a railway line built with state money is such - to select private entities in order for them to profit from it would be a violation of the above. Pretty simple actually, isn't it?
Is it a violation of the German constitution that private cars and trucks use the Autobahnen, instead of government-property Deustche TKW Ghmb? Or that private airlines use the runways of German airports? Actually, are other companies other than Lufthansa going to operate in the new Berlin airport?

Why is it so difficult for people to dissociate the TRACKS (which could be public property) with the VEHICLES (trains) using them, when the distinction is automatic in regard of other modes of transportation?
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Old January 10th, 2012, 08:27 PM   #1205
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Why is it so difficult for people to dissociate the TRACKS (which could be public property) with the VEHICLES (trains) using them, when the distinction is automatic in regard of other modes of transportation?
Because public and private transport are completely different things.

Even airplanes are often coordinated between them (Star Alliance, Skyteam, ...). Point-to-point services offered usually by low costs is a particular case not reproducible on railways, simply because airplanes wander around in a 3D space, while trains move in a strictly unidimensional environment that often creates huge constraints.
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Old January 10th, 2012, 08:49 PM   #1206
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Especially since we'd pretty quickly have an oligarchical system forming, much like what already happened in cargo rail transport in Germany.
Could you please explain this point? I'm very interested in the cargo question.
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Old January 11th, 2012, 12:44 AM   #1207
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Could you please explain this point? I'm very interested in the cargo question.
We have a handful companies that pretty much own the market through subsidiary companies. Most of this has only consolidated to current ownership structures in the last 3-4 years, with these companies buying up all other competitors. There are nominally something like 100 cargo rail companies in Germany, dozens of which were "independent" at some point, but most of these are effectively owned by three big ones, with in some cases company structures that give you a headache.

Those big ones are currently DB Schenker, Fret SNCF TLP and SBB Cargo. Especially SNCF has been buying up small German companies in the past couple years, DB Schenker too though. HSL Logistics, Trenitalia (through TX Logistics) and to some extent Wincanton Rail hold onto smaller market shares, often through having a solid base in quasi-monopolies somewhere, e.g. HSL concentrates a lot on short cargo hauls in the northern deepwater ports, while Wincanton owns the entire rail infrastructure in a port on the Rhine. Other than that there's maybe only half a dozen still independent small companies remaining.
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Old January 11th, 2012, 08:14 AM   #1208
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Why is it so difficult for people to dissociate the TRACKS (which could be public property) with the VEHICLES (trains) using them, when the distinction is automatic in regard of other modes of transportation?
Why is it so difficult to understand that for the government it is a _duty_ that tax payer money is well spend.
Currently the money spend on roads is not efficiently spend, exactly because access is unregulated, leading to traffic jams at some part of the day, and massive underutilisation for the rest of the time. Pleas don't inflict on the railways.
As to airports: If you really think that airlines are free to land whenever they want to at, for example, Frankfurt, than you now zilch about the airline industry.

When a railway line is build with tax payers' money the government has an obligation to make sure that the line produces maximum value for the public. The government has no such obligation to the train companies. That is what democracy and accountability mean. Companies may of course try to maximize their profit, but they are not entitled to having it easy.

The German State owns the network. If you really are so pro private enterprise, so pro free market as you claim you are then you should be aware what property rights are, and what they mean, and you should not have any problem that the owner of a piece of infrastructure should be allowed to make sure that it is used in accordance with what it conceives as its own interests.
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Old January 11th, 2012, 06:00 PM   #1209
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Especially SNCF has been buying up small German companies in the past couple years, DB Schenker too though.
Thanks for the answer. Did this happen mainly due to bad economic conditions of the smaller companies, or due to "interesting" offers recieved by the bigger ones?

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When a railway line is build with tax payers' money the government has an obligation to make sure that the line produces maximum value for the public.
...
the owner of a piece of infrastructure should be allowed to make sure that it is used in accordance with what it conceives as its own interests.
I think we should point out that, in railway, if infrastracture doesn't follow a rigid and regular timetable you're going to face serious system inefficiencies.
That's not an opinion, that's just the way it is. I think that sometimes we don't point out this because we consider it an obivious fact, but people not working or interested in railways may not know it.

What is more, it is well proven that a regular timetable will generate more passengers demand (and thus a higher usage ratio), since people will find a regular railway much easier to use.
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Old January 11th, 2012, 08:58 PM   #1210
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Thanks for the answer. Did this happen mainly due to bad economic conditions of the smaller companies, or due to "interesting" offers recieved by the bigger ones?
Open investment strategy with high offers in many cases. Back in 2007/2008 when this happened the German industry was in damn good economic conditions. SNCF at that point invested up to half a billion Euro (definitely a sum in the hundreds of millions though) into buying up a multitude of small German freight companies, often companies in the 100-200 employee / 30-50 million turnover range. DB Schenker ran a similar strategy a bit earlier; Veolia tried it too, but bailed out of the run on the German freight market after half a year and sold their bought-up companies to SNCF.
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Old January 11th, 2012, 09:52 PM   #1211
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What is more, it is well proven that a regular timetable will generate more passengers demand (and thus a higher usage ratio), since people will find a regular railway much easier to use.
There is no counter-prove to test your hypothesis (a highly competitive market with multiple, non-colluding operators offering similar routes).

Similar arguments of yours were laid down in the early 1990s when EU dismantled the state-regulated intra-European air market in favor of ample liberalization. Doomsday scenarios were predicted and, guess what, we gained Ryanair and Easyjet and cheap flights that killed dangerous, outdated, Third World night trains in Europe for most of it.

Until we have a truly liberalized rail market (not a mere collection of local monopolies like the UK franchises), we can't know for sure regular timetables is the best possible arrangement.

No country with a sizable network has ever tried that since WW-2.
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Old January 11th, 2012, 10:35 PM   #1212
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Wait, man. What kind of counter-prove do you need? Any system, switching from "my next train will come at a random time" to "I'm sure to have a train within 60'", has seen a rise of demand. Isn't this enough? Should we set those systems back to a random timetable to prove the point?

I agree about the need to open the rail market, I think anyone capable of buying a train and respect safety laws should be allowed to sell its services, but the timetable is not a limit. Who manages the infrastructure is obliged to follow a repetitive timetable to keep the system efficient, this is a technical limit and not a political one.
Given that a certain type of train must run at a certain time for technical reasons, then you are free to open whatever you want. You can sell the slots with yield management, operators are free to choose how to invest their money (more confortable trains, better onboard services), and they're free to sell tickets again with yield management.
This is a decently free market.

As of today, profitable services are somehow taxed to pay "poor" services. I would simply change this by not charging taxes upon the service but by asking a higher price for profitable slots. Same result, but a market more free to decide.

Anyway, you'll never have perfect competition in railways... the system has the technical limit that you can't pass a slower train whenever you want.

You might see real competition only in the night trains market, since there are no or little "system timetable" boundaries... and still the question is not so easy.
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Old January 12th, 2012, 01:01 AM   #1213
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Wait, man. What kind of counter-prove do you need? Any system, switching from "my next train will come at a random time" to "I'm sure to have a train within 60'", has seen a rise of demand. Isn't this enough? Should we set those systems back to a random timetable to prove the point?
Random time in the sense of often delayed trains is different than not-on-a-clock-face-schedule-because-someone-decided-time-should-be-measure-in-24h-of-60min-each.

But more important than that: you never had a situation of true competition for prices between non-colluding companies, in Germany or elsewhere. Your argument would only hold assuming that prices would be always the same, or at least centrally coordinated.

Once you bring price competition on, all hell breaks lose in the land of monopolistic, centralistic, soviet-Style railway management. Yes, people wanting to travel at odd times will be worse off. Yes, some cities will be vastly underserved but overall the population would see cheaper trains for the routes that encompasses majority of travel (exactly what happened with air market after the 1990s de-regulation).

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Who manages the infrastructure is obliged to follow a repetitive timetable to keep the system efficient, this is a technical limit and not a political one.
Given that a certain type of train must run at a certain time for technical reasons, then you are free to open whatever you want. You can sell the slots with yield management, operators are free to choose how to invest their money (more confortable trains, better onboard services), and they're free to sell tickets again with yield management.
This is a decently free market.
But that assumes routes are fixed.

It would be the same of obliging all buses in a highway to make the same stops in a set of cities along the route. Or oblige airplanes to stop in specified airports (that still happens a bit out of protectionism).

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As of today, profitable services are somehow taxed to pay "poor" services. I would simply change this by not charging taxes upon the service but by asking a higher price for profitable slots. Same result, but a market more free to decide.
This is another realm of problems, but it is getting tackled in Germany in the sense of, as a start, having the accountancy numbers for long-distance and regional operations separated. The real problem is that rigid timetables hidden unprofitable routes on the whole scheme of things. Add to that a relatively proportionality of fares according to distance, when it should be more or less ditched.

But it seems even the deeply discounted € 29 fares on ICEs causes some uproar because not all short relations can be bought with such discounts.

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Anyway, you'll never have perfect competition in railways... the system has the technical limit that you can't pass a slower train whenever you want.
Sure. But then you can change philosophies. Today, you run empty trains in Germany to stick to a timetable that is recurrent on short intervals. Tomorrow, you could have spare capacity on track, not on rolling stock, by overbuilding tracks in lieu of running much-bigger-than-necessary-except-on-peak-time trains.

This is the logic that orientates barge transport on routes constrained by docks and locks, or air transport, and road transport as well. Overbuilt the infrastructure to reduce the excess capacity on vehicles by allowing them to operate in a far more customized and irregular pattern.

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You might see real competition only in the night trains market, since there are no or little "system timetable" boundaries... and still the question is not so easy.
It depends. On heavily used freight routes, operating a passenger train is a nightmare.

Wants an example: the American railroads, by far and large the largest freight rail market in the World, optimized to that, but with deep flaws like lack of separation of ownership of ROW and tracks and operation.
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Old January 12th, 2012, 10:15 AM   #1214
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Random time in the sense of often delayed trains is different than not-on-a-clock-face-schedule-because-someone-decided-time-should-be-measure-in-24h-of-60min-each.
In France RFI is forcing SNCF to run to a clockface schedule. The arguments RFI gives for doing that is that is that they need to make the network useable for competitors to SNCF. the way to do that is to create a regular schedule, create a path catalog, and sell those paths to those interested.
This is the way the network operators work in in the Netherlands, in Germany and in Switzerland, precisely those countries where rail freight deregulation has been advanced most.
Seems to kind of point towards "regular timetables are to everyone's advantage", right?
Of course, running a network in a way that maximises value to all stakeholders runs counter to your political agenda, which is why you have declared it to be wrong.
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Old January 12th, 2012, 10:18 AM   #1215
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Doomsday scenarios were predicted and, guess what, we gained Ryanair and Easyjet and cheap flights ...
Ryanair's core business is rent seeking. That a vocal free market supporter like you likes Ryanair is baffling. Or maybe an indication how little you actually understand what you appear to defend.
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Old January 12th, 2012, 10:57 AM   #1216
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In France RFI is forcing SNCF to run to a clockface schedule. The arguments RFI gives for doing that is that is that they need to make the network useable for competitors to SNCF. the way to do that is to create a regular schedule, create a path catalog, and sell those paths to those interested.
This is the way the network operators work in in the Netherlands, in Germany and in Switzerland, precisely those countries where rail freight deregulation has been advanced most.
Seems to kind of point towards "regular timetables are to everyone's advantage", right?
Of course, running a network in a way that maximises value to all stakeholders runs counter to your political agenda, which is why you have declared it to be wrong.
Regular timetables =/= timetables with recurrent paths every 60 minutes.

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Ryanair's core business is rent seeking. That a vocal free market supporter like you likes Ryanair is baffling. Or maybe an indication how little you actually understand what you appear to defend.
There is nothing wrong with rent-seeking, if laws allow it. And I'm totally aware the Ryanair model is based on extracting money from the places they fly, then threatening to abandon them if not given more money (new tax exemptions, new airport facilities, revamped check-in areas etc). In cases like Malta, Spanish resorts, or cities not served by "traditional companies", they have the upper hand. So what? I don't agree with the idea, but as long as it is legal, no problems with that.
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Old January 12th, 2012, 11:55 AM   #1217
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Regular timetables =/= timetables with recurrent paths every 60 minutes.
Give me one good reason why, with recurrent paths, they should not repeat every 60 minute.

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There is nothing wrong with rent-seeking, if laws allow it. And I'm totally aware the Ryanair model is based on extracting money from the places they fly, then threatening to abandon them if not given more money (new tax exemptions, new airport facilities, revamped check-in areas etc). In cases like Malta, Spanish resorts, or cities not served by "traditional companies", they have the upper hand. So what? I don't agree with the idea, but as long as it is legal, no problems with that.
But why should it only go in one direction? If it's ok for private companies to seek to extract value from the government, the government should be able to do the same when it has the upper hand. When it owns a piece of infrastructure that private companies would really like to use for example...

If I am the owner of a shopping mall, can I stipulate that the shops operating in my mall are open from 6:00 till 22:00 7 days a week?
If I am the owner of a railway line, can I stipulate that however runs trains on it does so according to a timetable that I set?
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Old January 12th, 2012, 12:00 PM   #1218
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Give me one good reason why, with recurrent paths, they should not repeat every 60 minute.
Because as one with knowledge of operations research or linear optimization knows, you can calculate an optimal interval for a given network, that might, or might be not, 60 minutes. With powerful computers, it is fairly easy (if intensive) to find an optimal interval, over which you can create multiples if you want.

It depends on the physical infrastructure, on the constraints etc. But it can be calculated.

the "minute" and the "hour" are abstract constructs, there is nothing magical about "hourly repeated" schedules instead of 52min repeated or 70min repeated ones, for instance.


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But why should it only go in one direction? If it's ok for private companies to seek to extract value from the government, the government should be able to do the same when it has the upper hand. When it owns a piece of infrastructure that private companies would really like to use for example...
Because the government should be limited and confined, mingling as little as possible with private economic activity.
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Old January 12th, 2012, 12:27 PM   #1219
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Because the government should be limited and confined, mingling as little as possible with private economic activity.
.... Yet you ask for it to build the tracks wherever it wants.

Anyway that statement of yours just doesn't make it worth it to try to debate with you any further, you just hold to your belief and that's what you're debating in here - it has nothing to do with railways but about free market policies and that's a very different topic. Since it's a belief I also guess it's totally worthless to tell you that the world realized long ago that a completely free market economy does not properly work and that regulation and coordination by the state to maximize social profit is needed, specifically that was learned during the great depression in the US.
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Old January 12th, 2012, 12:56 PM   #1220
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Because as one with knowledge of operations research or linear optimization knows, you can calculate an optimal interval for a given network, that might, or might be not, 60 minutes. With powerful computers, it is fairly easy (if intensive) to find an optimal interval, over which you can create multiples if you want.
If you take an existing network, and try to calculate an optimal interval you will get nowhere. Any non trivial railway network is too complex for that. You have to do it the other way around, define a target interval, and use that in infrastructure planning. If you are going to pick an interval, why not 60 minutes?

In Kobe there exists an underground railway through the city centre, owned by a private company that does not run its own trains. This railway is used by four different private railway company. The schedule on that line is based on a 60 minute interval, with each company getting slots. That forces those companies to use 60 minute intervals on the rest of their networks too, but it is the only way this will work. You have to define a standard. And by keeping the standard constant you make it possible for the participating companies to engage in long term planning.

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It depends on the physical infrastructure, on the constraints etc. But it can be calculated.

the "minute" and the "hour" are abstract constructs, there is nothing magical about "hourly repeated" schedules instead of 52min repeated or 70min repeated ones, for instance.
Acutally there is something special, almost magical, about the number "60". 60 is divisable by 2, 3, 4, 5 and 6. That means that a 60 minute interval can be quite easily and trivially be divided in sub intervals of whole minutes. That is actually why there are 60 minutes in an hour.
So 60 is a good standard.

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Because the government should be limited and confined, mingling as little as possible with private economic activity.
Setting clear standards so that cooperation and fair competition is possible is however a proper function of government.
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