New performance and financing agreement
from 2020 for the existing network
The term of the LuFV II ended on December 31, 2019. During the five-year term, we continued to intensify the modernization of the existing network. The contractual objective to invest a total of € 20 billion – consisting of the Federal Government’s infrastructure contribution, the dividend payouts of DB AG and DB funds – in the existing network, was met in the years 2015 to 2019.
The preservation and modernization of the existing infrastructure will be continued as of 2020 by the LuFV III with a significantly increased budget. After over two years of negotiations, the Federal Government – represented by the Federal Ministry of Transport and Digital Infrastructure and the Federal Ministry of Finance (BMF) – and DB Group reached an agreement with a duration of ten years, which entered into force on January 1, 2020. By the year 2029, a total of € 86 billion will be invested in the maintenance and modernization of the existing network (thereof € 24 billion from DB funds). The annual resources available for capital expenditures and maintenance are therefore increasing by about 54% compared to the LuFV II. Both the Federal Government and DB Group are significantly increasing their contributions. In addition, the post-tax earnings of the railway infrastructure company should be distributed to the Federal Government and reinvested in full again in the rail infrastructure.
In addition to the technical requirements, further significant additional requirements were also identified, for example for capacity-saving construction measures, raising platforms to increase accessibility, digital BOS radio and video systems. A contractual provision was also set for the first time to reduce the investment backlog (backlog requirement) in LuFV III. A total of about € 4.5 billion is provided for this in particularly critical areas.
In addition, annual target values for the individual quality indicators have been agreed, which ensure a continuous improvement in infrastructure quality. During the term of LuFV III, the Federal Government and DB Group will examine whether the system of quality indicators will be modified and, in future, the cause and effect relationship between the funds used and the achievable infrastructure quality can be used in the target value calculation.
The longer term creates more planning certainty for us and the economy. This means that the construction and planning companies’ capacities can be developed in a future-oriented manner, and long-term agreements with suppliers can be concluded. This serves as an incentive for more consistency and innovation in the rail construction industry.