Germany should break up ailing national railway company, experts say

The government needs to break up its national rail operator Deutsche Bahn to counter grave quality deficits of the railway system, the German Monopolies Commission warned on Tuesday.

Germany privatised its national railway company in 1994, but the emerging company, Deutsche Bahn, still belongs entirely to the German state. It effectively monopolises long-distance rail services and operates all rail infrastructure.

“Germany’s railway infrastructure is currently in a bad state. It is labelled as limited, antiquated, and prone to failure. … [Existing deficits] are reflected above all by train delays on a massive scale,” reads a report on the state of the railway system, published by the Monopolies Commission, an independent government advisory body, on Tuesday.

Last year, Deutsche Bahn reached a 10-year-high when it comes to delays. Around one-third of all trains were delayed in 2022, the company had to admit in January.

“It is high time for ambitious reforms,” Jürgen Kühling, chair of the Monopolies Commission, pleaded.

The report recommends structurally separating Deutsche Bahn’s infrastructure from the rail service provision department to ensure that infrastructure is optimised for use by a wider range of competing rail companies to increase quality and competition.

Germany’s three-party coalition government has previously announced plans to turn Deutsche Bahn’s infrastructure department into a not-for-profit subsidiary, as a reform of the problematic condition of the railway system is a salient issue in Germany.

Therefore, governing coalition members welcomed the report as backing for their plans.

“We’re finally resolving the inherent mutual dependence and conflicting goals of infrastructure from railway operations by disentangling them,” Valentin Abel, MP and mobility spokesperson of the governing FDP, told EURACTIV.

Similarly, his Green counterpart, Stefan Gelbhaar, called the report a “tailwind” for its approach to reform the Deutsche Bahn.

However, the practical impact of the government’s ambitious goals for promoting the railway system remains uncertain. Furthermore, the report also went one step further and demanded a complete separation of the infrastructure and the railway operations.

The government, however, wants the infrastructure department to remain a part of the parent company.

“Breaking up Deutsche Bahn is not a goal of the [coalition], and it won’t happen,” the Greens’ speaker on mobility, Stefan Gelbhaar, told EURACTIV.

Moreover, it was revealed Tuesday that FDP Finance Minister Christian Lindner will provide less than half the amount asked for by Deutsche Bahn for the restoration of railway infrastructure in the 2024 national budget, due to be presented on Wednesday.

(Nick Alipour | EURACTIV.de)