Demand for Urgent Reforms in Private Freight Railways Across Germany
Rail Reboot: New German Government Urged to Pump Up Deutsche Bahn
Hey there! Today, private freight railways are pleading for a speedy makeover of Deutsche Bahn (DB), Germany's state-owned rail giant. Peter Westenberger, head honcho at the Association of Freight Railways, dropped a bold statement: "This calls for a commanding approach." The federal government needs to draw up a ownership strategy for the railways sharpish and start actively steering the company more proactively than before. Failure to act promptly means that funds earmarked for 2025 and 2026 budgets and a whopping €500 billion infrastructure modernization fund could end up being distributed carelessly and obscurely.
According to Westenberger, the ball's in the government and parliament's court to initiate a rail reform blast-off and take those first steps before the summer vacation. There's an apparent rail reform agreement in the coalition agreement of Union and SPD for the mid-term, but new transport minister Patrick Schnieder has asked for a bit of patience and sworn off hasty decisions. He's not expected to make any personnel decisions until the fall, and he plans on investing in all modes of transport, prioritizing existing infrastructure renovation over new construction.
Freight railways have a bone to pick about DB InfraGO, DB’s infrastructure division, which took on a common good orientation at the start of 2024. They argue that it needs to be further untangled from the company’s operations, as stated in the black-red coalition agreement. Westenberger calls out the incongruity of the common good orientation given the high profits of the division. He points to forecasts predicting a surplus of around €600 million this year and potentially €1 billion by 2026. As an urgent measure, Westenberger suggests terminating the domination and profit transfer agreement between the subsidiary and the company. He also suggests no board position for infrastructure within the state-owned company that favors it over private competitors and banning personnel zig-zagging between the company and the subsidiary.
In essence, the German government is under pressure to shake up the rail industry and sort out the delicate issues in the rail network to boost competition, efficiency, and general satisfaction among passengers. Let's see if they're up for the challenge!
(Source: Reuters)(For additional questions, contact our newsroom at [email protected] (for politics and economics) or [email protected] (for companies and markets).)
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The German government is urged to intervene in the rail industry, particularly in Deutsche Bahn, to boost competition, efficiency, and public satisfaction. The politics and economics of this decision could significantly impact the finance and business sectors, making it a general-news topic.
Meanwhile, Kontron, a company specializing in embedded computing technology, is on the brink of clinching a substantial deal worth millions with Czech Railways, a development that highlights the intersection of the rail industry and the markets.
Lastly, the debates surrounding interest rate cuts and its potential impact on inflation rates fall under the domain of finance, economics, and general news, as they can influence various business sectors and investments. The ongoing discussions about dividend cuts in Euro Stoxx companies also fall under this category.
