International Railway Journal - October 2008 - (Page 52) The last word Arriva seeks stronger German position Arriva is one of the most successful independent operators in Germany. CEO Klaus Jacobs outlines his views on the state of the market to Andrew Roden. F ROM bus services to rail, Arriva has a wide range of operations across Germany. Its turnover in 2007 was ƒ318 million, compared with ƒ178 million in 2006. This year, it expects to increase this to more than ƒ450 million. With 30 million train-km and 50 million bus-km, it operates more than 200 trains, 50 freight locomotives, and 900 buses. With more than 550km of track, it is the biggest private infrastructure provider in Germany. Arriva started in 2004 with the acquisition of the Prignitzer Railway (PEG) in eastern Germany, and today provides train services with successful brands such as Vogtlandbahn and Alex. It made some very important purchases in eastern and northern Germany, which CEO Mr Klaus Jacobs believes makes it an especially strong company in this region. ”In recent years,” says Jacobs, “the German public transport sector - the biggest in Europe - has developed enormously in terms of opportunities for independent operators, as well as in terms of competitors. Of course, German Rail (DB) is the dominant player, and will consolidate its position after its partial privatisation. “Nevertheless, the number of players has increased and the market has become more complex and more challenging. In particular, the next 18 months will see more tenders to operate private rail services across Germany, while the size of the tenders is increasing far beyond today’s standards. The growing competition stimulates creativity to improve service quality and efficiency.” Jacobs views DB’s privatisation with optimism, believing it could become a template for further sell-offs of state-owned operations: “I large and complex. Due to the think privatisation is very political framework and the positive and could become a federal structure of the model for municipal transport country, there are a lot of companies. Arriva is a key different stakeholders that player in the German have to be considered. transport market, and we Likewise, the requirement of believe that there will be many stakeholders and customers opportunities for further may vary in different regions. expansion.” Above all, the level of service And existing concessions are quality is very high in performing well too, he says. Germany. To succeed in this “One of the reasons for our market, a service provider has success is that our operations to be able to implement perform according to their excellent performance every local needs. Arriva did and day. We achieve this, and are does always strengthen continually striving to regional roots because they improve,” says Jacobs, who help to recognise our believes competition consumers’ “We are can only be good for needs. passengers. Simultaneously, competing Arriva provides against other as the holding industries for company all its people for whom experience and expertise where rail may not have needed.” been on their Much of this success is down radar before.” to Arriva’s Klaus Jacobs fundamental belief in the importance of its staff. “We focus very much on people on training, and on having clear systems and processes.” And continuing this policy is vital, believes Jacobs: “We have to remain at the state-ofthe-art, and to be a leader in people as well “Savings compared with the as technology. Attracting new existing situation were as high people is vital as new fields of as 90% on certain tenders expertise are developing, such even if the incumbent did win as tenders, so we have to build at a much lower price. This up and develop our expertise. shows that the incumbent We are competing against operators do take competition other industries for people for seriously now. whom rail may not have been “But competition also boosts on their radar before.” the creativity of bidders: new Maintaining performance is concepts with respect to becoming ever-more vital, rolling stock, maintenance and with increasingly stringent onboard service are being contracts for concessions, developed and implemented, something Jacobs believes has and where there are net encouraged operators across contracts or at least incentives Germany to raise their game. for increased passenger “The German market is very revenue, bidders do develop new ideas to enhance the number of passengers using public transport. “However, it is important that the clients ensure that they provide a level playing field.” While some operators may find the introduction of the European Rail Traffic Management System (ERTMS) as an expense which will have little impact on their day-today operations, Jacobs says that Arriva, with its crossborder passenger and freight operations, is working actively to support it. “We are a panEuropean player,” he says, “and we are actively supporting it, through the Community of European Railways and Infrastructure Managers (CER), and at more local levels, such as our involvement in the British ERTMS steering group. Perhaps understandably given his position, Jacobs is highly positive about the future for Arriva’s position in Germany: “We see many chances for future developments in the German market: the number and size of railway tenders in Germany is dramatically increasing. The growth of the freight business in Germany is continuing. Arriva is already among the biggest private transport service providers and it is our aim to strengthen this position and expand our activities.” For a company that has been in the German market for a relatively short time, Arriva has made a big impact - and the increasing trend for concessioning and more local management means that further expansion is likely to be on the cards. IRJ 52 IRJ October 2008
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