- 15

_-_ suburban passenger markets to separate institutions. More akin to the original BR approach are the internal reorganizations in France (SNCF) and Spain (RENFE); the Swedish rail operator (SJ), shorn of its fixed facilities (see below under the "toll-rail enterprise") has also organized itself along market lines.<sup>17</sup> ' 33. Faced with the need to consolidate the East and West German railways, a German government commission has developed a coordinated set of restructuring proposals. These embody several elements of recent reshaping schemes elsewhere: a new State-owned company, Deutsche Eisenbahn AG (DEAG) would "manage and maintain the infrastructure, receiving fees for its usefrom _its own business groups and possibly from other operators_ [emphasis added]. " Incorporating aspects of the lines-of-business and, potentially, competitive access options, this arrangement would follow the EC directive in requiring separate cost centers and accounting for fixed facilities and operations, respectively. Services would be divided along commercial/ noncommercial lines, with the latter receiving PSO payments from regional and local authorities. The commission's report does not explicitly delve into DB's overstaffing problem, nor does it promise to eliminate the civil service status of current employees.<sup>18</sup> ' 34. In 1990, RENFE unveiled an ambitious restructuring plan. In essence, it created two distinct types of business units (BUs): "market" BUs to plan, market, coordinate, and be financially accountable for the various lines of business; and "functional" BUs to perform operations and maintenance according to "profit performance criteria," by agreement with the "market" BUs. One "market" BU, High-Speed, will exercise a greater degree of direct control than will the others over facilities and operations. Figure 2.4 illustrates the Spanish restructuring scenario.<sup>19</sup> ' Because the matrix of functional and market business units is innovative, RENFE's experience in applying this model will spark interest among railway managers throughout the world.

- 17/ Galenson and Thompson, op. cit., pp. 23-24.

- 18/ 'Strategic report forms basis to build commercial railway," _Railway Gazeue International,_ CXLVII (September 1991), p. 555.

- 19/ The figure is extrapolated from RENFE, "New Corporate Model," March 1990. This source -

- is unclear as to the precise span of control of the "high speed" BU i.e., whether it purchases some services from the functional BUs or is entirely insulated. The "ownership" function is arbitrarily identified with the Infrastructure Maintenance and High Speed BUs; of course, ownership actually rests with RENFE as a whole. The source also provides an organization chart showing how complex the model actually is. For example, the BUs are grouped into larger "directorates" as follows: high-speed and suburban each have a "directorate" of their own; infrastructure maintenance, "traffic" (operations analysis and control), freight, and parcel constitute a third directorate; regional and long distance passenger, with station services, constitute a fourth; and rolling stock maintenance, with "traction" (seemingly "train movement"), comprise the fifth.