Railway boss sees billion-dollar financial gap by 2029

Berlin. Despite additional billions for Deutsche Bahn from the federal government's infrastructure special fund, funding for rail could become scarce again in a few years. This could have consequences for new construction and expansion, fears Deutsche Bahn CEO Richard Lutz.

"The fact that we're getting additional money from the special fund is fantastic," Lutz told the German Press Agency. "This is a huge step forward, and the entire sector, and certainly also the customers in passenger and freight transport, are grateful to the government for this important 'pro-rail' signal."

Nevertheless, the money is still insufficient. The basic requirement for additional funding until 2029 to carry out the necessary renovations and lay the foundation for the digitalization of the rail network amounts to approximately 45 billion euros. "For the 2025 and 2026 budget years, which will be approved by the Bundestag in the coming months, we are quite close to these required figures," said the head of the railway.

But after that, the additional need will increase. There will be a shortfall of around 17 billion euros by 2029. "Whether this funding gap can still be closed will be revealed in the coming months and years."

Last week, the cabinet decided that the railway should receive approximately 107 billion euros for infrastructure investments until 2029, significantly more than was provided for in the budget of the previous federal government. According to dpa information, a large portion of the sum, approximately 81 billion euros, will come from the federal government's debt-financed special fund.

However, this also includes funds amounting to approximately 38 billion euros, which have previously been earmarked for the federal government's core budget and are to be transferred from there to the special fund. Also at risk are planned funds that were supposed to flow to the railway as equity in the coming years – approximately 14 billion euros.

If these sums are added out, the railway would receive additional funding of 29 billion euros from the special fund by 2029. However, according to Lutz, it would need around 45 billion euros.

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"Ultimately, it is of course the federal government and parliament that determine how much money should flow into the railways in Germany, and thus significantly influence how the capacity, stability, and quality of the rail infrastructure will develop," the CEO continued. Based on the final decisions, Deutsche Bahn and the federal government will do everything possible to set the right priorities and improve the operational situation for passengers and freight customers. "Maintenance and renewal of the existing infrastructure always take precedence over new construction and expansion," Lutz said.

These have long been suffering from the poor condition of the rail infrastructure, which has been neglected for decades. Once again, more than a third of all long-distance trains were delayed in the first half of the year. According to the railway, around 80 percent of these delays were due to infrastructure problems and necessary construction work.

To get the problem under control, Deutsche Bahn will be renovating dozens of heavily used lines of central importance to nationwide rail traffic over the next few years. However, it was recently announced that the schedule for this so-called general renovation will be pushed back by four years. The final line is now scheduled to be modernized in 2035 instead of 2031.

The federally owned company is currently discussing the new schedules with the industry and politicians. "We expect DB InfraGo to be able to adopt a coordinated concept with the federal government in the third quarter," said Deutsche Bahn CEO Lutz. "The previous schedule, which was also coordinated with the federal government and the industry, was ambitious, without question. Of course, everyone knew that we have an incredible amount of work to do in terms of renovation, especially in the years from 2028 onward."

Since the respective corridors will be completely closed for months during the renovations, passengers and freight companies must accept replacement services and long detours. The CDU/CSU in particular, but also competitors in the freight transport sector, have therefore always been skeptical about whether the general renovation could be completed by the early 2030s. The new government's coalition agreement states that the schedule will be continuously reviewed.

"There remains a tension between driving and building, which must be balanced and resolved both in the multi-year renovation program and in the construction site management during the year," emphasized Lutz. "An extended schedule is of course a good thing in terms of market compatibility. However, we must not overlook the fact that the desired target state, in which we once again have a fully renovated and high-performance infrastructure, will then be postponed by several years, and the operational risks from failure-prone systems that can only be replaced and upgraded later will persist for longer."

RND/dpa