German government plans more funding for new rail infrastructure

The German government intends to invest more money in the construction of new rail infrastructure and upgrades to the existing network next year. 

Investment from the Ministry of Transport's budget section is set to rise from around €1.8 billion to €2.2 billion ($2.05 billion-$2.51 billion). This is according to the Ministry of Finance's draft Cabinet proposal for the 2027 federal budget, which was seen by dpa on Saturday. 

The German Cabinet intends to approve the draft on Monday.

In addition, there will be funding from the Ministry of Defence's budget section. 

According to the Allianz pro Schiene, or Alliance for Rail, funding for new construction and expansion there is set to rise from around €0.55 billion to around €0.68 billion. Certain railway lines are classified as being of military necessity. 

At the same time, however, the budgetary allocation for the existing network is set to fall to around €15 billion, criticized Dirk Flege, managing director of Alliance for Rail. 

Funding for the digitalization of the rail network is also set to be cut.

Flege said the draft budget raises questions about the rail policy strategy of Transport Minister Patrick Schnieder.

Ministry of Transport pushed for more funding

During the budget negotiations, the Ministry of Transport had insisted on more funding for new rail projects and network expansion. In the coming years, many billions from the debt-financed special infrastructure fund will indeed be channelled into the rail network. However, the focus here is on the refurbishment of existing railway lines.

A spokesman for Schnieder had said that the ministry was keen to ensure that, alongside the urgent refurbishment and modernization of the existing network, the expansion and construction of new rail infrastructure in Germany also made significant progress, in order to improve the reliability of the network. Many trains on the rail network are running late.

The transport association VCD had criticized the fact that rail projects were being halted one after another. "This coalition has more money than any before it for infrastructure refurbishment - and yet it is allocating far too little for the expansion and new construction of the rail network," said VCD chairwoman Christiane Rohleder.

Criticism of cuts to track access charge subsidies

The Association of Private Freight Railways welcomed the planned increase in funding for the expansion and new construction of the rail network. 

"Rail will not remain competitive through renovation alone - it must also grow," said Managing Director Neele Wesseln. However, she criticized the planned cut to track access charge subsidies for rail freight transport. These are set to be reduced from €345 million in 2026 to €200 million in 2027.

This sends the wrong signal, said Wesseln. "If the funding is cut now, the federal government will make rail freight transport more expensive - and cause a further shift from freight trains to lorries."

Track access charges are a kind of rail toll. The Transport Ministry is planning a fundamental reform of track access charges.