‘Urgent investments’ needed for German rail infrastructure, but will they be made?
Recently, the German coalition government decided to break with the ‘road finances road’ principle, outlined in a reform package. But will the needed investments in railway infrastructure – 45 billion euros until 2027 – be made? For that, we have to “wait and see”, says the German Pro-Rail Alliance.
With outdated rail infrastructure and more than every third long-distance train delayed in 2022, the need for more investments in rail infrastructure is urgently felt in Germany, also by the Federal Government. Changes are set in motion, most notably the fact that from 2024, eighty per cent of the money from the CO2 surcharge of the German truck toll will from 2024 onwards go to railway investments, instead of road like before.
However, when it comes to the investments in rail infrastructure, which the government itself put a price tag on of 45 billion euros until 2027, there remains uncertainty. The only money that is guaranteed to go to rail infrastructure, is the 80 per cent of the CO2 surcharge of the truck toll. The cost charge for CO2 emissions will be based on a CO2 price of 200 euros per tonne of CO2 emitted.
How much this will add up to is still unclear. When inquired about what the expected revenue is of this CO2 price, and which amount will thus go to rail, a spokesperson of the German ministry of Infrastructure (BMDV) responded that information on the revenue forecast “will be published in the course of the legislative procedure regarding the introduction of the CO2 differentiation”.
Question of financing still up in the air
The German Pro-Rail Alliance has estimated that raising the surcharge could roughly add around 6 billion euros to the revenue, of which 80 per cent would roughly mean an additional 5 billion euros per year for the railway infrastructure, a spokesperson of Allianz pro Schiene said to RailTech. As the measure would start in 2024, this would mean around 20 billion euros until 2027, just over half of the necessary 45 billion. The remaining financing is still up in the air, as the coalition document stated that the 45 billion investment is to be covered “as far as financially feasible”, not stating any numbers, which leaves room for the German government to not fulfil the requirement.
The Alliance received the reform overall with mixed feelings. On the one hand, director Dirk Flege said “The coalition is now clearly committed to financing the digital equipment of locomotives and railcars – even beyond pilot projects. This is a clear directional decision in terms of rail digitalisation”, in response to the package. However, the package overall he called “overall disappointing”.
“Germany is not among those who spend most for the railway. So it is important to note that the 45 billion euros will definitely be needed in addition to current investments during the next years”, the spokesperson of the Alliance said. “We will have to wait and see. Of course, we will monitor the next steps and keep reminding the government on the promised billions for the railway infrastructure which are needed urgently.”