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German State Rail Plans Further Cuts

World Economic News

German State Rail Plans Further Cuts

According to the latest financial report, which Deutsche Bahn state rail chief executive Hartmut Mehdorn presented to the company's supervisory board a few weeks ago, the German railway operator will drastically reduce its lines, in particular, for freight transport. Currently, Deutsche Bahn maintains a railway net of 37,000 kms. As some of these routes include more than one track, the total length amounts to 65,000 kms. Of these, 5,200 kms are supposed to be idled, according to the new cost-cutting scheme. In addition, Deutsche Bahn plans to abolish 22,800 out of 88,200 existing switches—this means that one-quarter of all the devices necessary to switch tracks will go out of operation.

While Deutsche Bahn claims that these cuts in physical infrastructure will not significantly affect German freight transport, the federal association of transport companies VDV warns there will be another sharp increase in railway bottlenecks. An internal VDV study, so far, not published, reveals that recent cuts in the Deutsche Bahn railway net have already led to a critical situation in certain locations, such as for freight transport around Duesseldorf and Kiel.

Deutsche Bahn is still state-owned, but is in the process of privatization. The company wants to go public soon, however, the IPO had to be postponed several times. In order to become more attractive for future stockholders, Deutsche Bahn has already cut back its infrastructure investment programs for the coming years.