The majority of the German coalition government has approved the proposed budgetary cuts for 2024. Concerns that rail transport would receive considerably less funds for the running year are now confirmed. Nevertheless, the situation is better than initially expected since the government made some essential adjustments.
The expectation from the draft budget 2024 was that rail freight transport would be 252 million euros short in 2024, with significant cuts affecting single wagonload transport, track access charges subsidies and the Future of Rail Freight Transport programme. While for this programme funding will be reduced by 16,3 million euros as initially stated, the other two segments will be partially alleviated by the initially heavy money cuts.
Specifically, single wagonload transport (SWL) was supposed to get 65 million euros less in 2024, with money taken from the so-called Anlagenpreisförderung, a programme meant to finance part of the costs regarding the usage of rail freight facilities. According to the German government, a new approach to this measure will see SWL short of 20 million euros in 2024 instead of 65, with 45 million euros saved for this year.
On the other hand, regarding the subsidies for track access charges (TAC), the federal government was planning to reduce funding in 2024 by 170.7 million euros. This would mean a 49 per cent reduction and 179.3 million euros available for TAC subsidies. In amending this measure, the government reallocated 50 million euros from ERTMS projects to TAC funding. In the end, the government will have 229.3 million euros available for this type of subsidy.
All in all, the total cuts affecting rail freight are estimated to be approximately 186 million euros. The 2024 budget approval has only been granted by the coalition government. It will enter into parliamentary discussions on 29 January, and the German parliament will decide whether it will be adopted.
Complications still in place
One of the major concerns around rail funding is the TAC subsidies. Despite the government allocating an extra 50 million euros for this purpose, the overall cut (almost 120 million euros) is still substantial and could cause trouble for operators. The situation is especially critical considering that the German Infrastructure Manager DB InfraGo also aims to increase TACs by 13,4 per cent starting in December 2024. Associations have warned that the timing of increased TACs and reduced subsidies could be detrimental to operators.
Moreover, another issue concerns the scope of rail financing. The last-minute budgetary cuts jeopardise the rail freight market’s stability and delivery of critical railway projects and investments. As a result, industry body Allianz pro Schiene has underlined the importance of a multi-year funding schedule and plan that would provide the German railway sector with much-needed long-term financial security instead of one-year funding.