Balancing performance and finances

Public transport in Germany is of high quality. Due to its technical and operational competence, the German public transport system is a shining example of strategic public transport for many countries to observe. The high quality level of German public transport depends on many factors, not least on sufficient funding.

Kölner Verkehrs-Betriebe AG (KVB) is the fourth biggest municipal public transport company in Germany. With 272.4 million passengers recorded in 2010, KVB is the number one mobility service provider in the metropolis of Cologne on the Rhine. Since 1995, the passenger load has increased by more than 25%.

KVB offers its transport services on 11 lightrail lines and 51 bus lines. The transport scope amounts to 53.6 million vehicle kilo – metres or 7.7 billion seat kilometres (in 2010). To deal with such figures, there are approximately 300 buses and 368 light-rail vehicles in operation. The bus route network is 553km-long and the light-rail network is 240km-long. In 2010, there were approximately 3,200 employees working at KVB at a total expenditure of nearly €302 million. Over 74% of that expenditure was covered by fare revenue and other sources of revenue. The remaining amount of approximately €86 million was provided by cross-subsidising within the Stadtwerke Köln GmbH, in which the municipal companies of Cologne are united.

KVB urgently needs increased capacity

On behalf of KVB, two highly reputable scientists have examined the conditions for the future services of the company. In the first six months of 2011, KVB transported five million additional passengers than previously seen, and a new passenger record is expected for the complete year. Since 1995, when 218.2 million passengers were transported, the passenger load increased by approximately 25%, and the network was only extended slightly during that period. Now, the performance limit has been reached on the existing lines, especially within the light-rail system. The company is now concerned with how it can maintain a suitable level of quality for its passengers.

Professor Michael Wegener of Spiekermann & Wegener Urban and Regional Research (Dortmund), and Professor Felix Huber from the University of Wuppertal, have analysed the development of the population in Cologne on behalf of KVB. In some districts in the south and the west of the city, as well as along the inner city ring, the population is expected to grow, whereas other districts will experience a decrease in population. Due to this demo – graphic change, the route patterns will also change with regards to both the areas and the timetable. Above all, there is a need for action on the Cologne east-west axis, which is already at its capacity. KVB operates the light-rail lines 1, 7 and 9 on this axis.

Furthermore, there is the political target of climate protection. It will not be possible to reach the climate protection targets of the state of North Rhine-Westphalia (NRW), Germany’s most densely populated area, without con siderable improvement in public transport. Greenhouse gases are to be reduced by 80% by 2050 in NRW. This target can only be reached if people use their private cars less frequently and instead opt to travel by bus and light-rail.

KVB has examined whether it will be possible to operate three-vehicle trains on the east-west axis. It seems that this measure can be realised faster than the building of under ground tracks between the Cologne junctions of ‘Heumarkt’ and ‘Neumarkt’. An increase in the frequency of trains has also been considered, but the margin is very narrow. However, the funding of this project will be a major obstacle.

KVB’s macroeconomic benefits ustifies public support

The public community represented by its municipal and state institutions makes high demands on the efficiency of public transport. The political targets of ensuring mobility, climate and environmental protection, development of business and urban development, as well as the avoidance of further road constructions, are to be realised e.g. by increasing the public transport share.

Simultaneously, the public community’s share in funding the infrastructure and operating the public transport is decreasing. Traditionally, public co-financing has been very important in Germany to keep the fares at a moderate level and to make it possible for all sections of the population to use bus and rail. The present quality of public transport in Germany would not have been reached if the Federal Government, the states and the municipalities – the three levels of the public community – had not financially supported public transport services.

The economic importance of public transport companies like KVB cannot be perceived merely from the economic balance, though. These companies make economic losses, which are balanced by other companies within the scope of co-financing. However, the municipalities, the traffic participants, the companies in other sectors and the general public profit directly from the services of the public transport companies so that the macroeconomic account can be seen as the real balance of the public transport companies. In Germany, the public transport services are a ‘provision of elementary requirements’. Public transport has to function properly so that many other things can function.

Therefore, KVB realises that the public co-financing of its infrastructure and its opera – tion is important. To illustrate the positive effects of KVB, the company has prepared another study entitled ‘Regional Benefits from the Transport Services of KVB’. The results of this study point out the economic importance of the company. Two experts – Bernd Kolberg from Intraplan Consult GmbH (Munich) and Professor Dr. Richard Klophaus at the University of Applied Sciences of Worms – have applied a method for the study that is recommended by the Federal Ministry of Transport. Theoretically, the following is asked in the reduction scenario: “What would happen if the services of KVB were reduced by 50%? Which pecuniary changes could be ascertained?” In short, the results were as follows:

The economic importance of KVB

For each Euro that flows into KVB, a value of €5.3 arises in Cologne. The reason is that although a reduction of the services of KVB by 50% would reduce the need for subsidies by €26.5 million, an increase in expenditure of altogether approximately €139.4 million would arise somewhere else.

The importance of KVB for the mobility in Cologne

Only if the service quality of KVB remains at its present level is it possible to avoid the construction of further roads and parking spaces and to keep up with the traffic quality of private car traffic. The reason is that a reduction of KVB services by 50% would lead to a shift in traffic, mainly to the private car. The municipal budget would be burdened by an additional €27 million, approximately. Besides the extra burden of about €27 million on the municipal budget, additional expenditure would arise for the traffic participants themselves. They would have to pay, altogether, €130 million for the provision and running of their cars as well as for additional parking charges. By contrast, they would only have to pay €58 million less for the public transport fares.

The importance of KVB for the labour market

Each of the 3,200 jobs at KVB ensures another job in the region of Cologne due to the investments and purchases of KVB and its employees. Seventy per cent of these jobs are in Cologne itself and 30% in the surroundings, inclusive of Leverkusen and Bonn. Furthermore, the public transport offer is an important location factor for other sectors. If all effects of the labour market are added up, also beyond the region, altogether 8,100 jobs are related to the services of KVB. These 8,100 jobs, which are connected directly, indirectly or secondarily with KVB, mean a gross value added of more than €467 million per year.

A major part of KVB’s expenditure is of benefit to Cologne. In 2010, KVB purchased goods and services at a total order volume of €253 million. Fifty-nine per cent of this order volume went to suppliers in Cologne itself. Even approximately 64% of the wages and salaries for KVB employees, which amount to €133 million in total, can be allocated to the area of the city of Cologne. This means about 82 cents of each Euro that KVB pays flows into the region. Sixty-one cents even remain directly in Cologne.

The importance of KVB for climate protection and the environment

If KVB only performed 50% of its services, an additional 37,000 tonnes of carbon dioxide would be emitted in Cologne each year. The reduction of the emissions of public transport vehicles would be far less than the increase in emissions from private cars. The costs for environmental and accident consequences would also increase. Due to the reduction of public transport services, these costs would decrease by €15 million per year in the public transport field, but the costs for the individual motor car traffic would increase by €55 million per year, due to the shift of traffic to private cars. The general public would have to pay for this increase.

These facts confirm the importance of KVB underlining the perspective of its performance even more clearly.

Strengthening urban mobility in Cologne

The biggest automobile association in Germany, ADAC, is regarded as the German car drivers’ lobby. Its political influence is considerable. It cannot really be expected that the representation of car drivers support public transport. However, ADAC has initiated a car driver campaign together with the transport companies in the Rhineland, which aims to make car drivers use other transport modes, like public transport, more often.

In Cologne, KVB and ADAC had a campaign together with the regional transport association VRS to promote the alternatives of the private car and the linking of various modes of transport. KVB was a good partner for ADAC as the Cologne mobility service provider is open to all customer groups and does not restrict itself to its regular customers, who travel by bus and rail in most cases.

The example of P&R facilities

Thanks to P&R facilities being placed right next to KVB stops, it is possible to combine private traffic with public transport in a way that is environmentally friendly. Such facilities make KVB particularly interesting for people whose cars are unbeatably advantageous against any other mode of transport in the rural and small-town suburbs of the surroundings. However, it is a must that the cars can be safely parked and that the users have easy access to the public transport and are provided with adequate information.

This is illustrated by the P&R facility in Weiden-West: this facility was erected in 2005/06 simultaneously with the extension of light-rail line 1, and had to be extended and a later date. Today, its capacity is at 90-100% on average weekdays. Car drivers reach the entire inner city of Cologne within 30 minutes at the most with KVB’s light-rail line 1 as well as with the rapid transit lines S 12 and S 13 of the Deutsche Bahn AG.

The large-format display at the P&R facility provides real-time dynamic passenger infor – mation about light-rail transport and the rapid transit transport. The passenger can see when their train will depart. With these large-format displays, KVB is improving its passenger information and the company uses modern IT solutions to integrate several data sources, thus considering the various public transport modes.

Linking public transport with bicycle traffic

At distances between 0.5 and three kilometres, cyclists are faster from door-to-door when compared with other transport modes, including pedestrians. If the distances are longer than five or six kilometres, they are less attractive for the average cyclist, especially if part of the way is along roads with heavy traffic and bad conditions for cyclists. Embarking on a journey that uses a combination of bus, rail and bike is not going to convince car drivers to switch from the comfort of their own vehicles and use public transport.If a cyclist can ride part of the way and park their bike at a secure KVB stop then it becomes more likely that they will use public transport for the remainder of their journey.

The light-rail stop ‘Südfriedhof’ (light-rail line 12) is an example of a stop that can develop into an interlinking stop. This will make it possible to use passenger potential to a higher degree in the southern area of the district of Zollstock and further into the districts of Raderberg and Radertal.

The stop ‘Rodenkirchen Bahnhof’ (light-rail line 16) is another example. It will also be possible to include the district of Rodenkirchen- Weiß, which is not directly next to line 16, in the light-rail system by combining bike and rail. Both light-rail lines connect the districts mentioned with the inner city, but it seems that it is not attractive for some passengers to reach the light-rail lines by bus. Therefore, the com – bination of bike and rail can reduce the traffic load on the limited urban roads and reduce the need for parking space, too. Consequently, KVB strives to increase the number of bike parking facilities, especially right next to KVB stops.

The example of pedestrian traffic

The average pedestrian will be inclined to walk if the distance to their destination or to the next transport connection does not exceed one kilometre. Therefore if public transport stops are too far away from the front door, the attractiveness of public transport decreases and the competitive force of the private car increases. Nevertheless, private car drivers do not really want to get stuck in urban traffic jams. If the public transport company succeeds in increasing its service level, it has got a convincing argument, e.g. the certainty of bus or rail vehicle departure, particularly if the interval is shorter than 10 minutes.

Therefore, KVB is continuously developing passenger information systems (MOFIS or DFI) which have been installed along many bus lines. Large-format displays at the popular shopping street ‘Schildergasse’ provide people with realtime information during their shopping trips, before they go to the stop ‘Heumarkt’. In the future, KVB will also use the growing popularity of informing their passengers of travel information via mobile telephones.

Barrier-free access has improved in Cologne. Eighty-four per cent of light-rail stops and 29% of bus stops were made barrier-free in 2009. All KVB buses offer barrier-free access as they are equipped with wheelchair ramps and low-floor facilities. Therefore, the 29% barrier-free stops are not a poor value. Another 33 stops are on the priority list, 15 of these stops are to be barrierfree by 2015 if possible.

This broad approach shows that KVB does not restrict itself to its regular customers and to ask the public community for help for the rest of its financing requirements. Meanwhile, about three quarters of all inhabitants of Cologne regularly travel by bus and rail in Cologne. And even more people are expected to do so in the future.

The ‘new line 5’: an example of public spirit by the construction of public transport infrastructure

One of the few line extensions of the KVB network is a 1.8km-long section in the northwest of the city at the end of light-rail line 5. The public transport offer by rail was to be extended to the industrial park ‘Butzweilerhof’. The scope of big construction projects in the field of public transport infrastructure has decreased in Germany. Line extensions and new construction projects are not rare, but mean – while the number of projects is rather small. It is also unlikely that this line extension would have been realised with the classic funding. Although 11,000 people work in the industrial park, only a few people live in that area.

Nevertheless, KVB and the municipality of Cologne have realised the extension of light-rail line 5. The special feature of this project is primarily that the line extension was realised with the help of considerable co-financing from the private sector of the economy. Private companies paid about €5 million, and KVB itself invested €13 million. After the first year of operation of the extended line, it can be stated that on a daily basis the line is utilised to a high degree for most of the day.

The extension of the light-rail infrastructure was put into operation just over a year ago, at the change of timetable in December 2010. Since then, passengers in the northwest of Cologne can use three new, barrier-free stops along the 1.8km-long new line section.The construction period was eight months. After the extension was put into operation there is now a mobility alternative directly in the industrial park ‘Butzweilerhof’, in which about 400 companies are located. The ride from the industrial park to the inner city of Cologne takes about 20 minutes and the Cologne main station can be reached in less than 30 minutes.

The extension is not the only change of the line. So far, three of the already existing classic stops along the roadside have been recon – structed or constructed at new positions to barrier-free stops in the middle of the road. Another three stops will follow. KVB has invested €4.3 million in that project and the municipality of Cologne €6.2 million. Obviously, it pays not only to target more people by extending the infrastructure. In fact, the reconstruction of already existing stops into barrier-free stops is also a kind of improvement of the transport conditions or – so to speak – development of the public transport. In that way people who would not have been able to reach the light-rail system earlier due to their restricted mobility can now use the public transport offer.

KVB has been receiving many inquiries about its line 5. Interested parties have asked whether the Cologne model project can serve as an example for other cities. It is always meaningful to examine alternative possibilities of realisation in addition to the public funding. And it is meaningful to evaluate a line in its entirety. Thus, within the scope of this Cologne project, KVB and the municipality of Cologne also succeeded in retrofitting the existing line and reducing the barriers thanks to the valuable support of private companies. In May 2011, a celebration with the inhabitants to mark the occasion clearly underlined the win-win situation.

The example of the ‘new line 5’ shows that KVB taps new resources in addition to the public co-financing. The project stands for a high degree of financial responsibility and the fact that KVB actively performs its task as a mobility service provider.

About the author

Jürgen Fenske initially trained as a secondary school teacher, before going on to study Business Administration and taking up his first role in transportation, as the Office Manager of the Minister of Economic Affairs and Transport, Peter Steinbrück, in 1994. Since then, Mr. Fenske has held a number of senior positions in this field, including Managing Director of Regionalbahn Schleswig- Holstein, Chairman of the VDV-Landesgruppe Nord and Manager of the Northern Region of DB Stadtverkehr. In 2008, he became Chairman of the supervisory board of Autokraft GmbH, before taking up his current position as CEO of KVB AG in 2009. In the same year, Mr. Fenske also became President of the VDV (Association of German Transport companies).