German rail faces legal fight over rival access

German national rail operator Deutsche Bahn must in future make more room for competitors on heavily used long-distance routes, Germany's Federal Network Agency has ruled in a final decision, confirming a preliminary ruling from late June. 

Deutsche Bahn and several German states reacted with sharp criticism on Friday, and legal action against the ruling is being considered.

The decision centres on the planned 2028 entry of Italian rail company Italo into the German long-distance market. Italo had filed a complaint with the Federal Network Agency over the way Germany's already limited rail capacity is allocated, seeking improved conditions for new competitors.

Deutsche Bahn must free up capacity at key hubs

The Federal Network Agency has now ruled that DB InfraGo, the Deutsche Bahn subsidiary responsible for infrastructure, must allocate at least a quarter of capacity on certain routes to competitors. This applies to heavily used corridors with designated capacity caps, such as those planned for the Munich and Frankfurt hubs.

"We will examine and assess the Federal Network Agency's ruling in detail," Deutsche Bahn said. A submission by InfraGo to the agency's ruling chamber meanwhile makes clear that the company considers the decision legally questionable.

'Procedural and investigative errors'

In the submission, which dpa has seen, InfraGo accuses the agency of "systematic procedural and investigative errors." It argues there is no legal basis for regulatory intervention by the Federal Network Agency, pointing out that InfraGo's allocation of track capacity to competitors has not previously been challenged on legal grounds.

Several German states have also raised concerns, according to submissions also seen by dpa. Bavaria, for instance, fears that regional rail services in rural areas will suffer if the Federal Network Agency's ruling stands.

"Unlike the Federal Network Agency, I am genuinely concerned that regional rail services will be adversely affected precisely where several rail operators will in future be competing for lucrative slots," Bavarian Transport Minister Christian Bernreiter wrote in his submission.

Brandenburg fears cuts to long-distance services in rural areas

Brandenburg warned of a reduction in long-distance services outside major cities. "A central problem is that long-distance services are likely in future to focus increasingly on economically attractive routes and slots," the state's submission reads. "The current cross-subsidization of lightly used long-distance connections through revenue from profitable routes will fall away."

Competing voices stress benefits of competition

There are dissenting voices, however. The Federal Network Agency's ruling - described as "targeted and limited to a small number of network sections" - in fact protects the interests of local and freight transport, said Mofair, the association representing Deutsche Bahn's competitors. Competition had already led to higher quality and lower prices in local transport, it said.

Freight rail operators also welcomed the agency's decision. "It enables greater competition in long-distance transport despite tight capacity on the rail network, without disadvantaging other modes of transport," said the Freight Railways association.

Federal government urged to act

The rail advocacy group Allianz pro Schiene said: "Now it is up to the federal government to present a concept for competition in long-distance transport that ultimately benefits passengers."

Simple ticketing, cross-operator ticket validity and integration with the national timetable framework were key priorities, said the association's chief executive Dirk Flege.

The submissions have not changed anything. The agency's ruling stands unchanged.

Parties such as Deutsche Bahn could now pursue legal action against the ruling at the administrative court in Cologne. What this means for Italo's planned 2028 market entry remains open.