ABSTRACT
This chapter addresses the situation leading up to 1994 and the urgent need for some form of Bahnreform. By January 1994, the German railways were in dire need of reform. They were horribly out of shape, both fiscally and physically, and their popularity as a mode of transportation was in serious decline. The problems, costs, and fears that led to the Bahnreform were substantial. The post-war history of the German railways had been characterized by sharply decreasing market shares and increasing deficits. The German government took the first concrete steps toward reform in early 1989 with the appointment of the Federal Railway Governmental Commission. The success of the Bahnreform to date can be evaluated only in light of its original goals. In a preliminary reorganization before the adoption of the reform legislation, railway activities of a commercial or entrepreneurial nature were separated from tasks that were and would remain a special responsibility of the state.
