Even Deutsche Bahn is no longer glossing over the situation on the rails in Germany. “The railway infrastructure is in a critical condition and cannot meet the demands for quality and capacity,” said CEO Richard Lutz when presenting the business figures for 2022.
Punctuality is poor, the infrastructure in many places is dilapidated and overloaded. In addition, there was a collective bargaining dispute with the EVG railway union, including a large warning strike last Monday – times at the railways are turbulent. But billions in commitments from the federal government provide confidence.
Transport Minister Volker Wissing has repeatedly emphasized that the federal government will make every euro available to the group in the coming year that it needs to expand the capacity of the rail network. “And then we will also look at the same for 2025,” said the FDP politician. A few days ago, the coalition committee put the financial requirements of Deutsche Bahn at 45 billion euros by 2027. The money is to come in part from the truck toll, which will be increased for this.
Bahn boss Lutz was pleased with the compromise. Financing will be simplified and construction projects accelerated. Nevertheless, it is controversial whether the funds are sufficient to reduce the investment backlog that has lasted for years.
General renovations from 2024
General renovations on particularly important routes should soon ensure noticeable improvements in operational processes. In the summer of 2024, things will start on the Riedbahn between Frankfurt and Mannheim, a main artery in the rail network.
General renovation means: The route will be completely closed for several months, but will then be completely renewed during this time – even the parts that might still have a few years left. By 2030, a high-performance network is to be created between the major German cities that will meet demand.
Punctuality and reliability should increase significantly with the first renovated routes. However, during the period of full closures, passengers will face considerable restrictions in the form of rail replacement services and long diversions.
Despite all the problems, demand for long-distance transport is growing. Deutsche Bahn expects around 155 million passengers in the ICE and IC trains this year. That would be a passenger record in long-distance traffic. Around 132 million travelers were transported there last year. In the previous record year 2019 there were 151 million.
According to the coalition agreement, the federal government wants to double the number of passengers in long-distance rail transport by 2030 compared to 2015. “The railway is in a fortunate situation because customers are queuing up. Passenger traffic is constantly increasing, and freight traffic could also continue to increase,” said Wissing. In terms of punctuality in long-distance transport, Lutz is aiming for a rate of “well above 70 percent” for 2023.
Schenker has a positive influence on the overall balance
The economic situation at Deutsche Bahn remains tense. In operational business, the state-owned group was back in the black in 2022. The bottom line was a loss of around 227 million euros. The fact that the minus was not greater was due to the logistics subsidiary DB Schenker, which achieved record results. The subsidiary made a profit of around 1.8 billion euros before interest and taxes (EBIT).
The group is currently examining a possible sale of Schenker “with an open mind”. With the expected proceeds in the billions, the main aim is to reduce the level of debt. Financial debt rose to more than 31 billion euros last year. According to CFO Levin Holle, the mountain of debt could increase to around 33 billion euros by 2023. He expects a group-wide minus of around one billion euros in the operating area for 2023.
Lutz was relaxed about the collective bargaining. “My view of the collective bargaining round is relatively unexcited.” The warning strike on Monday hurt. He regrets the restrictions for customers. But he is confident that this time too a “reasonable and responsible solution can be found together with the EVG”.
Because of the warning strike, all long-distance traffic and most of the regional traffic were canceled on Monday. The EVG demands at least 650 euros more per month or twelve percent more money for the upper wage groups. Among other things, Deutsche Bahn has offered to raise wages in two steps by a total of five percent. In addition, one-time payments of a total of 2500 euros were promised. The EVG rejects this.
