Modernizing Germany's Railways: A Call for Investment and Change
German Rail Industry May Augment Funding for Expansion of Railway Infrastructure
Get ready to roll with renewed vigor! That's the message from the German rail industry, urging the new federal government to invest those extra funds in revamping the aging railway network. According to Andre Rodenbeck, president of the VDB industry association, they've already shown their prowess in managing a financial lift, as demonstrated by the meticulous renovation of the bustling route between Mannheim and Frankfurt am Main.
Rodenbeck is eager for the Union and SPD-led government to promptly decide on the allocation of funds and their specific purposes. The coal-and-black faction aims to make the railway more attractive by allocating funds from the budget and the €500 billion infrastructure modernization fund. A well-orchestrated rollout is crucial for companies to boost their workforce and enhance their capacities.
In 2024, the rail industry in Germany rang up a record €15.0 billion turnover, up by 4.2 percent. The export sector was the major driver, surging by 16 percent, while the infrastructure segment also showed a dynamic 13 percent growth. Despite these positive numbers, the domestic vehicle segment took a nine percent hit due to underfunding of passenger transport, which, in turn, lead to a restraint in vehicle procurement, as per Rodenbeck.
The industry's order intake sits at €18.3 billion, a high number, but 15 percent less than in 2023. To tackle this, the new government should act swiftly on digitization, which is known as the industry's major stumbling block. Currently, less than two percent of the German rail network is digitized, consuming a hefty chunk of manpower. Digital control centers, on the other hand, require only a seventh of the current workforce, making them a great option considering the demographic shifts.
Sarah Stark, CEO of the VDB, highlighted another concern: public funds are often dispensed for too short a period, the system for accessing funds is overly complex, and the time from legislative approval to the implementation of projects often surpasses the tenure of the government. In essence, the money's route from the legislator to the project needs to be shortened and streamlined.
The modernization plan includes a halt to network reductions, a focus on expanding and rejuvenating disabled sections, renewal of existing systems, and increasing the network's resilience. To fund these updates, the industry proposes performance and financing agreements, record investments, and tapping into large-scale funding like the €150 billion infrastructure modernization plan advocated by Deutsche Bahn.
So, are you ready to climb aboard the train to progress? Let's chug along to a brighter, modernized future for Germany's railways!
The German government, following its decision on allocating funds and their specific purposes, should consider investing in vocational training programs to enhance the rail industry's workforce capabilities and boost businesses. In light of the rail industry's significant budget surplus in 2024, made possible by lucrative export sectors and infrastructure modernization, it would be beneficial to allocate a portion of these funds to finance such training programs, thus contributing to the industry's modernization policy.
