Symposium on
Competition & Regulation
in the Rail Sector

The 18th Symposium on Competition & Regulation in the Rail Sector took place on 30 January 2025. It was held at a time when the new legislative periods in Germany and Europe mean the direction has to be decided on how to strengthen competitiveness. The performance of infrastructures is central to this. Readiness to invest considerable capital and quickly implement projects will play a decisive role in determining the progress that can be made.

It was clear from the speeches and discussions held that the volume and design of infrastructure funding must be improved fast and purposefully to make the rail system viable for the future. For competitiveness to be increased, capital expenditure in infrastructure was essential. By the same token, said DB's CEO Richard Lutz, for climate protection to be stepped up, it was crucial to have a strong railway. The next Multiannual Financial Framework, for 2028 to 2034, would be of huge importance for Europe's infrastructure development. German Federal Minister Volker Wissing emphasised that more speed is needed above all in a transformation phase. He said that in the past three years, more money than ever before had been made available for rail infrastructure in Germany, to the sum of over EUR 35 billion. The corridor overhaul projects were a key building block for shifting more passenger and freight transport to rail. The amendment to the German Federal Railway Infrastructure Development Act had removed questionable incentives and enabled the federal government to also promote the maintenance of the network. Alongside the establishing of the public service-oriented infrastructure company DB InfraGO AG, a paradigm shift had been initiated in the managing of DB, which would enable the federal government to exercise its control more effectively. Wissing referred to the Infraplan and to a performance agreement for the existing network to be set up in line with it, which would effectively improve the planning, financing and management of infrastructure investments in the future.

Piotr Malepszak, Deputy State Secretary at the Ministry of Infrastructure of the Republic of Poland, described the Polish vision for the development of the European railway sector. In order to promote European integration, gaps in the European rail network should be closed and cross-border transport services expanded. Malepszak advocated focusing on practical solutions to problems that would improve rail operations quickly and efficiently and have tangible benefits for passengers. The electrification of cross-border rail lines, such as those between Poland and Germany, was important for Europe. In the discussion that followed with Dr. Richard Lutz and Stefan Schnorr, State Secretary at the German Federal Ministry for Digital and Transport, Malepszak argued in favour of focusing on infrastructure in the next EU budget. Schnorr also referred to the importance of the trans-European transport network for Europe's competitiveness. As part of the next Multiannual Financial Framework, he expected to see clear signals for climate-friendly rail on issues that addressed competitiveness and needed to be tackled at European level. This included the continued digitalisation of rail transport by means of the European Train Control System (ETCS) and digital automatic coupling. Referring to the Letta Report, Lutz explained that rail was one of the few industries that made a comprehensive contribution to realising EU internal market freedoms.

In the afternoon, the discussions pivoted around a possible infrastructure fund and the regulations for train path allocation and track access charges. In her keynote speech, Christa Hostettler, Director of the Federal Office of Transport of the Swiss Confederation, explained the structure and functioning of the Swiss Rail Infrastructure Fund. A number of mechanisms anchored in the constitution (federal and cantonal resources, taxes and levies) contributed to the open-ended, fixed-purpose fund. The fund financed the operation, maintenance and expansion of Switzerland's rail infrastructure. Preservation took priority over expansion, meaning that only as much was built as could be maintained long-term. Every programme and project was backed by appropriate financing. This allowed construction capacities to be built and utilised in a logical manner. She said that the fund was effective, as could be seen by the fact that Switzerland's rail network was generally in very good condition and the rail companies were able to operate reliably and safely. The railway made a significant contribution to relieving road congestion, preventing traffic jams, ensuring environmental protection and boosting the economy. A long-term, stable infrastructure financing is therefore worthwhile. Hostettler said that any disruption to infrastructure made operations more expensive, and correcting it required much financial and human input.

The participants in the subsequent panel discussion agreed that the investment backlog must be countered with adequate funding. If the aim was to stabilise financing and make it more efficient and easier to plan, an infrastructure fund would be a suitable instrument. Schnorr outlined the Ministry for Digital and Transport's concept for a possible solution involving a fund that would cater to the German government's transport infrastructure. The aim was to facilitate long-term financing and achieve greater planning certainty for infrastructure managers and the construction industry. The necessary increase in funding would require setting up new sources of financing, which could also be private capital. Michael Peterson, Member of the Management Board for Long Distance Passenger Transport at DB AG, said that DB believed a fund would offer many advantages for the rail system and that it should be implemented soon. With more stability and planning certainty, the system would have clearer framework conditions, helping operators to use the infrastructure more effectively. With regard to the desired traffic transition, Bärbel Fuchs, Chair of the  Sector Advisory Board, referred to the importance of the Germany´s nationwide integrated regular interval timetable project (Deutschlandtakt) for the further development of the rail network. It was necessary to consider what transport volume was wanted and what infrastructure was required for this. Only with clear answers to these questions could all market participants, such as the passenger transport authorities, invest their resources with the best impact.

Stable and predictable financing would also help to overcome another challenge: competitive rail transport required affordable, reliable track access and station charges that were fairly distributed across the market segments. Daniela Brönstrup, Vice President of the German Federal Network Agency, said increasing DB InfraGO AG's equity to finance the infrastructure in particular had recently led to a sharp rise in track access charges. As raising track access charges in regional and local rail passenger transport was limited by law, rail freight and long distance rail passenger transport were disproportionately burdened by the rising charges. This weakened rail transport's competitive position vis-à-vis other modes of transport and thwarted the goal of shifting more traffic onto the railways. The panellists agreed that the rules for the track access charging system needed to be reformed. Alan Beroud, CEO of Polskie Koleje Państwowe S.A. and Chairman of the International Union of Railways (UIC), talked about the interdependencies between different modes of transport. It was necessary to find a balance between rail and road in terms of the main costs. Not only infrastructure usage charges, but also electricity costs were a key factor in rail transport's ability to stay competitive. These had doubled or tripled in Germany and Poland in recent years. Further options needed to be considered for infrastructure funding. Beroud cited income from EU emissions trading as an example.

A need for reform was likewise identified regarding the rules for train path allocation in Germany. In this country, timetable planning and train path allocation were geared towards enabling as many train journeys as possible. Peterson said that DB InfraGO had few instruments for controlling capacity utilisation in such a way that stability and quality could be ensured. Fuchs also wished for more stability in the system. Hostettler stated that a lot was being done in Germany in an extremely busy network. In order to maintain flexibility in a congested system, investments must be made in keeping assets such as exit, access and stabling sidings, crossings, points, overpasses and service facilities in good order. Schnorr said that capacity utilisation could be optimised through digitalisation. In addition, reliability, punctuality and quality should be given more consideration in train path allocation. This would require legal adjustments in the future.