The Production Costs of Railway Services. A Comparison of Performance between the German, Swiss, and Austrian Railway Companies

Market revenues of the Austrian Federal Railways (ÖBB) have increasingly lagged behind expenditure, necessitating ever higher subsidies from the Federal government. Other railway companies too, rely heavily on public transfers. On the basis of the 1995 financial accounts the article develops a set of comparative indicators of cost and revenue patterns for the German Railways Ltd. (DB-AG), the Swiss Federal Railways (SBB), and the ÖBB. A major focus of analysis is, at what cost one unit of output (unit kilometer) was being produced, and to what extent such cost was covered by contributions from users (customers) on the one hand, and by the government on the other. Excluding interest payments, social outlays and depreciation, items for which a base for comparison is difficult to establish, costs per unit-km were calculated at 1.01 ATS for ÖBB, 1.27 ATS for DB-AG, and 1.49 ATS for SBB. These costs were covered by revenues from customers at a ratio of 68 percent at DB-AG, 72 percent at ÖBB and 75 percent at SBB. Public subsidies (excluding retirement payments) per unit km amounted to 0.70 ATS at DB-AG, 0.82 ATS at ÖBB and 0.97 ATS at SBB in 1995, with pensions only for the SBB not being financed by the government. For the sake of comparison, public transfers including (net) pensions to the ÖBB totaled 1.45 ATS per unit km in 1995. Of the three companies surveyed, SBB exhibited the highest labor productivity and the highest customer fees, with profitability being squeezed by the high wage level. The ÖBB may boost significantly its rather low productivity by outsourcing of activities and rationalization measures. On the revenue side, customer fees notably for daily commuters offer scope for improvement.