Germans agree to privatise railways: State funds will be poured in for 'the beginning of a new age' aimed at attracting more traffic and reducing costs

THE GERMAN parliament agreed yesterday on privatisation of the country's railways, in a move officially hailed as a 'historic hour', and 'the beginning of a new railway age'.

The agreement had been held up for many months by arguments about who should contribute to the upkeep of the railways in the years to come. But there was consensus among the main parties yesterday that the move was to be applauded. The transport spokesman for the opposition Social Democrats, Klaus Daubertshauser, talked of a 'chance for a new beginning'.

On 1 January, the west and east German railways - which until now continued as separate entities, the Bundesbahn and the Reichsbahn - will be merged into a single company, the Deutsche Bahn AG, whose shareholders will initially be the state, but which is planned to be fully privatised in the years to come.

In contrast to Britain, plans for privatisation are seen in Germany as a way of increasing the importance of rail travel. Central funding of infrastructure investment will continue. The environmental benefits are emphasised, in a country where the motorways are permanently clogged, and where high- speed trains seek to compete with planes over short distances. Meanwhile, the enormous debts incurred by the railways in recent years are to be written off, enabling Deutsche Bahn AG to start off with a clean financial slate.

Dionys Jobst, leader of the transport committee in parliament, said the railways could now 'perform better, take on more traffic, and cost less'. Mr Jobst, representing the CSU, one of the government coalition parties, was echoed by Mr Daubertshauser, who spoke on behalf of the Social Democrats of 'breaking the vicious circle of the growing mountain of debts, the neglect of the infrastructure and the declining share of the traffic'. The number of railway officials - tenured civil servants, under the present system - is to be radically reduced. But railway unions, too, said yesterday that the reforms were 'long overdue'.

In Britain - where the prime minister who put privatisation on the agenda was famed for her dislike of trains - some advocates of privatisation have argued that the railways should be left to fend for themselves, financially. In Germany, however, that has not been suggested seriously. Instead, the main argument has revolved around the division of financial responsibility between the federal authorities in Bonn, and the regional states, the Lander.

The Frankfurter Algemeine Zeitung complained yesterday that the deal between the federal government and the regions, agreed in principle on Wednesday, was too generous to the Lander. 'The Lander behave as though the need to save does not apply to them,' it said.

It is still unclear whether the proclaimed goal of reducing costs has any serious chance of being met. For the moment, funds look set to continue pouring into the new Deutsche Bahn.

But Heinz Durr, chairman of German railways, insisted yesterday: 'We will use the unique opportunity to reach the overriding goal, of bringing more traffic on to the rails - and of contributing to a long-term easing of the state budget.'