Frankfurt — A rapid and comprehensive modernization of the rail infrastructure is once again in danger of falling by the wayside, warn the unions EVG and IG Metall. While the governing coalition set the right course in its coalition agreement, the unions criticize the lack of consistency in implementation, with an eye toward the federal budget, which will be debated in Parliament starting this Tuesday. This is causing uncertainty among companies in the rail industry, jeopardizing jobs there, and leading to significant price increases for rail customers.
The unions’ main point of criticism is the subsidy for train path fees, which is far too low given the expected cost increases. As a result, significant price hikes in rail freight and long-distance passenger service are looming as early as this year. Furthermore, the already planned transfer of funds from the core budget to the Special Infrastructure Fund (SVIK) raises questions about the credibility of the promise of additional funding for the future. This is causing uncertainty in the rail industry, according to IG Metall and EVG. Furthermore, both unions criticize the fact that the announced railway infrastructure fund is still a long time coming—even though it would be crucial for long-term planning certainty. They also argue that the digitization of the rail sector must be given higher priority.
Martin Burkert, Chairman of the EVG: “Political will determines whether the transportation transition will ultimately succeed or not. The federal government must urgently reform the train path pricing system and increase subsidies for train paths in the short term. Otherwise, the steep price hikes will cause many passengers to switch to cars, and the industry will no longer transport its goods across the country by train but will instead clog the roads with countless trucks.”
Jürgen Kerner, Vice Chair of IG Metall: “We want the transportation transition to lead to a job creation drive in Germany. The need is obvious: billions must be invested so that more people use the railways, more freight is shifted to rail, and the rail sector enters the digital age. For the rail industry to expand its capacity accordingly, invest in its production sites, and hire people, it needs not only sufficient public funding but, above all, one thing: reliability and long-term predictability. That is why the announced railway infrastructure fund must not be put on the back burner. Nor should the impression be given that funds are merely being shifted from one budget line to another rather than being made available as additional funding.”
Higher Track Access Fee Subsidies and System Reform Needed
The federal government plans to significantly increase Deutsche Bahn’s equity capital. Because this equity capital comes with high return expectations from the federal government, the network operator must raise track access charges (the so-called rail toll)—by 16 percent for rail freight in 2025 and 18 percent for long-distance passenger service. The rail companies will pass on a large portion of the track access charge increase to their customers, leading to massive price hikes in long-distance passenger and rail freight transport. EVG and IG Metall are calling on members of parliament to prevent this during the parliamentary process. To achieve this, track access charge subsidies in the federal budget must be increased by at least 95 million euros for long-distance passenger transport and by at least 75 million euros for freight transport. Subsequently, the federal government should implement a fundamental track access charge reform to reduce the rail toll to the direct costs of a train journey, as has long been standard practice in other European countries.
Additional funding and planning certainty are prerequisites for investment
Construction cost subsidies for new rail lines, upgrades, and electrification have been significantly reduced in the core budget. This creates the impression of a budgetary shuffling exercise. That sends the wrong signal to the rail industry. Although the medium-term financial plan provides for a growing budget for investments in rail transport, it remains unclear how this will be allocated. The Railway Structural Fund announced in the coalition agreement would provide greater planning certainty in this regard.
A binding overall strategy is lacking for digitalization
The budget allocates additional funds for the digitization of rail—for example, for digital signal boxes and the European Train Control System (ETCS). The unions view this positively. From their perspective, however, implementation is lacking: projects are delayed, responsibilities are unclear, and there is no binding overall strategy. Without clear priorities and rigorous implementation, the digitization of the rail sector risks remaining piecemeal—with negative consequences for capacity, efficiency, and competitiveness.
