Billions for Rail, But at What Cost? Germany’s Freight Sector Calls for Transparency, Reform, and Real Separation

Germany is unlocking billions for rail, but the freight sector isn’t cheering just yet. With aging infrastructure, a murky governance model, and EU regulators circling DB Cargo, the real challenge now is spending smart—and splitting the system where it counts.

Germany’s freight rail sector is welcoming new infrastructure investment—but warns that funding alone won’t fix years of underperformance. In the latest issue of its newsletter, the Association of Freight Wagon Keepers in Germany (VPI) called for binding legislation, transparent governance, and structural separation between infrastructure and operations as billions in new funds flow toward rail upgrades.

"We’ve been running on wear and tear for far too long," wrote Malte Lawrenz, VPI Chairman. While the recent reform of the national debt brake has made it possible to boost infrastructure spending, the association insists that clear legal and structural frameworks are necessary to avoid repeating past mistakes. At the centre of these demands is the need for a binding multi-year infrastructure plan, known as the Infraplan.

The Infraplan: Binding Timelines, Not Empty Promises

Seven of Germany’s major railway associations have jointly proposed the creation of an Infraplan—a legally enshrined, five-year strategic plan that would define goals for maintenance, renovation, and network expansion, and be updated annually. This plan would serve as the basis for cooperation between the federal government, as the contracting authority, and DB Infrago, the public infrastructure company.

Lawrenz stressed the need for clear rules to ensure that funds are spent wisely, predictably, and transparently. Crucially, the associations stress that these funds must be genuine additions to the federal budget, not a reshuffling of existing allocations under the guise of a "special fund." They also demand reform of the track access charging system, calling for a move toward marginal-cost pricing, where infrastructure fees only reflect the direct costs of train operations. The associations argue that construction cost subsidies—not equity increases—should be the sole tool for financing rail infrastructure going forward.

Unbundling: The Time for Half-Measures Is Over

While the formation of DB Infrago as a separate entity within Deutsche Bahn was initially welcomed, VPI says the model hasn’t delivered. "DB Infrago isn’t fulfilling its mandate," the newsletter states bluntly, citing a lack of transparency and government oversight one year into the company's existence. The solution, according to VPI and a growing list of supporters, is full unbundling. That means clearly separating the monopoly infrastructure business from the competitive operations sector, similar to how road and waterway infrastructure is managed independently from logistics companies.

This call for separation is supported by several key bodies, including the Federal Court of Auditors, the Monopolies Commission, and the Federal Cartel Office, all of which have repeatedly criticised the current hybrid structure. The association argues that the network must serve the public good—not corporate interest. With billions at stake, pressure is mounting on the government to act decisively and remove internal conflicts of interest.

State Aid Probe Into DB Cargo Adds Urgency

While Germany debates domestic rail policy, European authorities are circling DB Cargo. In a guest article featured in the newsletter, Dr. Carsten Jennert, an expert in EU state aid law, examined the ongoing proceedings in Brussels over alleged illegal state support for DB Cargo, Deutsche Bahn’s freight subsidiary. According to Jennert, the outcome could significantly influence how state funds are allowed to flow into freight rail in the future. If EU regulators determine that subsidies to DB Cargo breach competition rules, it could prompt restrictions on public support, not just for DB, but for the broader German rail sector.

DB Cargo state aid approved //t.co/Rtoj9YGy4t

— Railway Gazette International (@railwaygazette) December 4, 2024

The issue is particularly sensitive given DB Cargo’s market dominance in Europe, and the implications for fair competition and access to infrastructure. For VPI and its members, the case props up the need for clear, independent governance of infrastructure assets—another reason why unbundling is essential.

Amid the policy debate, VPI also reported strong growth in its membership base and new developments in its digital services portfolio. Highlights include the VERS digital workshop card, which streamlines documentation in vehicle maintenance workflows, and preparations for TIV 2025, where live demonstrations of the Digital Automatic Coupler (DAC) are planned. These innovations are part of VPI’s broader strategy to modernise freight operations and support its members in navigating an increasingly digital logistics landscape.

Billions in Sight, But No Room for Complacency

With Germany finally mobilising major infrastructure funding, VPI is cautiously optimistic. But the association is clear: money alone won’t deliver results. Real change depends on binding investment plans, full unbundling, transparent pricing, and adherence to EU competition rules. "Once the money is available, the real work begins," Lawrenz stated.

Source: VPI Newsletter; dw.com