If you want the lowest purchase price, you turn down innovations
From 2021 she was a member of the executive board at the German Transport Forum e.V. (DVF). Before that she was head of European transport policy, security and rail transport at the association. In an interview with InnoTrans Report, she describes what needs to change - especially in German minds - in order to achieve the climate objectives set in Paris.
Ms Stark, what accents do you want to set in your work as Managing Director of VDB?
Sarah Stark: The German railway industry provides solutions. We are a reliable partner for politicians and operators when it comes to implementing transport policy goals. To double passenger numbers by 2030 and achieve a market share of 25 per cent in freight transport, we must accelerate the speed of implementation. I am convinced that politicians, operators and industry will succeed in achieving both together – if we focus more on solutions instead of problems. This creates a tailwind. Innovations and modern administrative structures speed up our processes and rail operations. The fast-track programme has shown that we can complete construction projects up to four years faster if they are managed by a general contractor. With digital train dispatch systems, we improve punctuality and capacity in the existing network. We must apply both as a matter of course. I am focusing on increasing the speed of implementation to achieve a modern rail system. What needs to be done was summarised by the Rail Acceleration Commission in its final report in December 2022. At the end of March 2023, the coalition committee set the financial parameters with its “Modernisation Package for Climate Protection and Planning Acceleration”. A Modern Rail Act must implement these decisions.
At the time, for their first 100 days, the VDB submitted ten priority measures for the next mobility revolution to the new Federal Govern- ment. That was a while ago now. What has happened in the meantime?
Sarah Stark: When the new federal government took office in 2021, the rail industry called for measures which were primarily aimed at accelerating the digitisation and electrification of rail transport. These included an increase in investments in line with the matching funding models. But they also included an acceleration in planning and the modernisation of tendering practices in Germany. If the current pace of investment in digitisation in rail transport was maintained, the railways would not be digitised throughout Germany until 2077 and that would be about 42 years too late. The additional 45 billion euros in investment funds for rail by 2027 which have been decided by the coalition committee will allow us to turn things around. The Federal Government's fundamental shift regarding vehicle equipment is a key factor in enabling a nationally coordinated migration path without costly years of duplicate infrastructure equipment. Practical solutions must be found for the extreme price increases resulting from the war in Ukraine. Like so many industries, disrupted supply chains, high inflation, and increased wage and energy costs are weighing on the rail industry. For our industry, which works with long-term supply and framework agreements at fixed prices, there is a need to find practical solutions. There is an urgent need for provisions which allow prices to be adjusted and additional costs to be shared fairly in both new and existing contracts. The Federal Government has provided the necessary leeway for building materials. The same should apply and be applied to control and safety technology.
In your opinion, what is needed to achieve the Paris climate goals?
Sarah Stark: In order to achieve the digital transformation in rail transport, companies need to build up operational capacities over several years – especially in terms of human resources. However, this requires a reliable perspective. The Federal Government's modernisation package allows dynamic funding. Now it is a matter of introducing leaner financial mechanisms to ensure that investments reach the market more quickly. It is only in this way that funding can fulfil its purpose and strengthen the climate-friendly transport mode of rail. Up to now, investments have been stuck in the jungle of regulations far too often and for far too long. And the way procurement is structured in Germany also needs to change. Mobility offers should be more strongly oriented towards the needs of passengers. The railway industry delivers innovations, from appealing interior design via digital information systems to climate-friendly alternative drives. But whether these innovations are put into operation is decided by public tenders. And in Germany, these tenders predominantly reward the lowest purchase price. This is neither good for the climate nor for customers and passengers.
Which rail technology is procured must in future be decided much more in line with social and sustainability criteria which exist in both Europe and Germany and are already enshrined in European and German public procurement law in the form of "Most Economically Advantageous Tenders". The MEAT principle breaks down the concept of economic efficiency and enables procuring entities to give greater weight to criteria such as the best price-performance ratio, low life-cycle costs, modern design, high sustainability or energy efficiency when awarding contracts. Germany must move towards the best offer. Those who want the lowest purchase price are rejecting innovations. More use should be made of MEAT criteria in federal and state tenders, and help desks should be set up to ensure their legally compliant application. We must not discourage ambitious goals because of the current framework conditions. On the contrary, we must adapt the framework in such a way that it makes it possible to achieve the climate goals. The rail industry is ready and willing to do this.