Traffic Light Negotiations: Railway to be Divided into Network and Operations
In the negotiations over a traffic light coalition at the federal level, it appears that the Greens and the FDP have advocated for the breakup of the DB Group. The Greens had already presented these fundamental plans for separating the railway network and operations during the election campaign, and they seem to have found a receptive audience with the Liberals. This is reported by Spiegel Online and Süddeutsche Zeitung. While the Greens prioritize climate protection and aim to double the number of passengers by 2030, the FDP is focused on increasing competition on the rails. The SPD, on the other hand, is opposed to the idea, likely considering the interests of the EVG union and wanting to maintain the combined operation of the network and passenger services. The debated plans in various forms ultimately all point towards a breakup of the company in its current form.
Railway network as a public welfare company?
The extreme case would involve transferring the railway network, i.e., the infrastructure, to a public welfare-oriented company, separated from the remaining sectors of regional, long-distance, and freight traffic. An intermediate solution aims at the founding of a formally unified holding company, under which the network and passenger services would be organized separately, each with its own board. A separation would also likely meet with approval from the EU.
Monopolies Commission Advocates for Breakup
The Monopolies Commission of the Federal Government also recently suggested a breakup. The railway should "dare more competition" and undertake the "vertical separation of Deutsche Bahn AG," demanded Commission President Jürgen Kühling in the Süddeutsche Zeitung. A major transportation shift is ahead, and this is "enormously important." The independence of the sectors could also increase transparency and reduce anti-competitive effects. The step would be relatively easy to implement since the sectors have already been managed separately. However, he does not consider privatization of the remaining railway to be necessary.
More important, he said, is to have an infrastructure operator who "does not optimize their approach based on the interests of the vertically integrated overall company but has the sole goal of shifting as much traffic as possible onto the railways. We need to remove the blockades," appealed Kühling.
The Monopolies Commission President goes even further, suggesting not only the breakup of the railway but also the divestment of federal shareholdings in Post (around 21 percent) and Telekom (over 30 percent), also to create financial leeway for future investments. The Post involvement is seen especially critically because the company massively benefited from the package boom during the pandemic.
Flixtrain: Link Track Prices to Usage
Among the previously rather marginal competitors like Flixtrain - DB has a market share of over 95 percent in long-distance traffic - the plans are welcomed anyway. For example, the Flixbus subsidiary Flixtrain points to successful models of separating network and operations, where more competition prevails on the rails. Additionally, the provider advocates for permanently lower track prices, which should be linked to the costs of usage, which would be about 80 percent cheaper than currently, as Flixtrain CEO Andrè Schwämmlein calculates to Spiegel Online. In Munich, they could react to the new situation as early as 2022 by expanding the existing routes with more trips. However, the political signal is more important for being able to invest in new trains in the long term.
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