Austria’s New Government Unveils Bold Railway Plans: Billions in Investments and Modernization Ahead

Austria has a new government as of March 3, with three political parties forming a coalition. What’s in store for the railway sector? A major modernization plan and multi-billion investments are on the horizon.

Austria's infrastructure investments are guided by a six-year plan with long-term targets (the so-called railway network objective) extending to 2040. The government's primary goal is to secure sufficient funding for investments, operations, and modernization. Plans will be regularly updated, with the government and parliament receiving reports to assess each project's impact on regional economic value, employment, climate goals, and crisis resilience.

Investments will be carried out in close dialogue with neighboring countries. The program specifically mentions the crucial Vienna–Innsbruck–Zürich railway corridor, which partially runs through Germany, where investment has been lacking.

Austria Strengthens Rail Transport and EU Cooperation

The government aims to make rail freight transport significantly more attractive. It plans to be more active in the EU, enhance cooperation with Germany and Italy, and push for the creation of a unified European railway area. This includes regulatory harmonization and continued investment in the Brenner Base Tunnel and the northern corridor leading to Brenner. Austria also intends to accelerate the nationwide rollout of ETCS, emphasizing that exclusive use of ETCS must be introduced in EU member states in a harmonized manner to ensure interoperability across borders.

Existing federal budget support for rail freight will continue. Funding programs are set to be long-term, attractive, and free of excessive bureaucracy, with a focus on digitalization, including DAC. At the EU level, Austria will advocate for raising the weight limit for craneable semi-trailers to 41 tons. The government also plans to support rail transport by tightening road freight regulations, increasing inspections for unfair competition, illegal employment, safety violations, wage issues, and social dumping.

Austria’s Government to Cut Red Tape and Boost Rail Transport

The government aims to remove bureaucratic and legal barriers in rail transport. It will start by reviewing national regulations in relation to technical standards in other countries, with the goal of international standardization. A key priority for infrastructure investment is the Brenner Corridor (Munich–Innsbruck–Verona), which is part of the Trans-European Transport Network (TEN-T). The program also points out the importance of maintaining regional, local, and private railways, considering them essential in shifting freight transport from roads to rail.

Austria’s New Government to Lower Taxes for Rail Transport

A strong commitment to supporting the rail industry is a key focus. According to the VCÖ association, Austria ranks fourth globally (after Germany, the U.S., and China) in railway industry exports, with an annual value of EUR 2.7 billion. The Austrian rail sector accounts for 7.9% of the global rail trade and employs 28,000 people.

The government aims to create a modern testing and competence center for rolling stock. This facility will feature state-of-the-art testing equipment and innovative research methods to reinforce Austria’s position in rail technology and mobility. It will be based on established collaboration between the public sector, educational institutions, rail operators, and industry leaders. By 2027, Austria plans to introduce a special program to recruit 1,000 additional apprentices and skilled workers for the sector.

The government also plans to exempt passenger and freight rail transport from all energy-related taxes and fees. With energy prices soaring in recent years, eliminating energy taxes is seen as the only viable measure—one that requires approval from the European Commission. Austria's railway legislation will undergo a thorough review to reduce bureaucratic and legal burdens. Additionally, national technical regulations will be assessed and streamlined to ensure better international alignment.

Sources: Government Programme 2025-2029; vcoe.at