Despite the significant budget cuts expected for the 2024-2027 period, Peter Westenberger, the managing director of the industry association Die Güternbahnen, is convinced that there are still enough funds to continue carrying out critical railway expansion and upgrade works in Germany. “There is no shortage of money in Germany,” he said, underlying that a Swiss investment model would be the optimal approach to keep expanding the network.
The budgetary cuts in Germany created a shockwave in the country’s railway sector. In addition to reductions in track access charges subsidies, single wagonload transport support and the Future of Rail Freight Transport programme, amounting to approximately 186 million euros, the German rail sector will also suffer from cuts in long-term infrastructure investments planned for 2024-2027.
For 2024-2027, the German government pledged a 45 billion euro budget for rail projects as part of its financial strategy. The funds were expected to be made available via the increased road truck tolls that Germany started implementing in 2024. Nevertheless, with the transport budget almost in place, it seems that the rail sector will be deprived of a substantial part of the funds.
According to the railway association Die Güterbahnen, the 2024-2027 budget will be reduced by 17 billion euros. This means that out of the estimated 45 billion euros, only 28 will be invested in rail infrastructure projects in the coming three years.
Lack of will, not funds
According to Westenberger, the lack of political will to divert funds from road investments to railway ones creates financing issues in the German railway sector. He believes there is no money shortage in Germany, and budgetary cuts should not affect long-term railway investments. “Motorways will continue expanding,” he commented, implying that funds are just targeting projects other than rail.
Westenberger also underlined that in the 2024 federal budget, there are still 1.7 billion euros available to mobilise for railway infrastructure investments. “This sum is nothing for Germany when Austria, a way smaller economy, expands its railway network with 2.2 billion euros per year,” he added.
However, he believes Germany must also develop better long-term investment planning, and the Swiss financing model could function as a blueprint. “Six billion euros per year will be needed in the medium term for expansion and renovation. These should flow into a multi-year fund based on the Swiss model,” he said. This is also the best possible approach to carry out the major infrastructure upgrades planned for 2024-2025 but also works on corridors that will be used as alternatives during those upgrades.
