Economic stimulus package of the Federal Government
On June 3, 2020, the Coalition Committee agreed on comprehensive measures in relation to the topic of “Tackling the Covid-19 Impact, Securing Prosperity, Strengthening Readiness for the Future.” These include a number of general relief measures for the German economy, while simultaneously providing industry-specific stimuli. The measures are divided into a stimulus/crisis-management package, a more wide-reaching package for the future, and measures based upon European and international responsibilities. The following measures are particularly relevant for rail transport:
- DB AG’s equity capital is to be strengthened to partly compensate for losses as a result of the Covid-19 pandemic. In the 2020 supplementary Federal budget, € 5 billion were taken into account for this purpose, which were transferred to 2021 in the new Federal budget because the coordination regarding state aid law with the European Commission was not completed in 2020.
- The Act on Accompanying Measures for the Implementation of the Economic Stimulus and Crisis Management Package implements the additional, one-time increase of € 2.5 billion in regionalization funds in 2020 and the possibility of reducing the Renewable Energy Sources Act (EEG) levy to 6.5 ct/kWh in 2021 and 6 ct/kWh in 2022 through compensation payments.
- In order to improve mobile communication coverage along the rail tracks, additional funding of € 150 million will be made available for non-disruptive GSM-R end devices in 2020 and 2021.
- The funding initiative to increase attractiveness and accessibility of stations will be increased by a total of € 160 million in 2020 and 2021 for immediate measures.
- Digitalization of infrastructure will also receive additional Federal funding of € 500 million by the end of 2021.
On August 7, 2020, the Federal Framework Regulation on Public Transport was approved by the European Commission. This means that the Federal Government can contribute € 2.5 billion to the public transport rescue fund. The Federal states want to make an equally high contribution to financing. It has been agreed that the amount received by DB Regional will be deducted from the calculation for the assessment of the equity strengthening.
Implementation of the Climate Action Program 2030
On the basis of the Federal Government’s Climate Action Program 2030, additional Federal funds totaling € 11 billion will be made available by 2030 to strengthen the rail system. At the end of January 2020, the Federal Ministry of Finance (Bundesministerium der Finanzen; BMF) and the Federal Ministry of Transport and Digital Infrastructure (Bundes-ministerium für Verkehr und digitale Infrastruktur; BMVI), as well as DB AG, DB Netz AG, DB Station & Service AG and DB Energie GmbH, agreed on the inflow and use of the funds in a joint letter of intent. The funds will be used exclusively for infrastructure; half will be paid as equity (to increase the equity of DB Netz AG and DB Station & Service AG) and half as grants. In terms of content, the funds will be used in the categories of robust network, digital rail, attractive railway stations and economically self-reliant infrastructure measures. The funds that are to be used to increase equity are subject to the European Commission’s approval, required on the basis of state aid law, which was not concluded in 2020. The funds planned for 2020 have been transferred to the 2021 Federal budget. Other key measures of the Climate Action Program 2030 relating to rail and public transport were also set out in concrete terms or implemented in 2020:
- On January 1, 2020, the reduction in value-added tax (VAT) from 19 % to 7 % for long-distance tickets (for long-distance transport over 50 km) came into effect. The associated price reduction was passed on to customers in full.
- At the beginning of 2020, the German Parliament and the Upper House of Parliament (Bundesrat) resolved to amend the Regionalization Act (Regionalisierungsgesetz; RegG) in order to increase regionalization funds of the Federal states for regional rail passenger transport. The € 8.8 billion planned for 2020, which will be increased by 1.8 % annually until 2031, will therefore be further increased: In 2020, 2021 and 2023, will be an additional increase of € 150 million on top available. Since these raises will also be increased at 1.8% per year, this will result in a total increase of € 5.2 billion between 2020 and 2031.
- At the same time, the German Parliament and the Upper House of Parliament (Bundesrat) have also significantly increased the means of promoting the construction and expansion of rail-based public transport (especially rail). The annual Federal funds from the Municipal Transport Financing Act (Gemeindeverkehrsfinanzierungsgesetz; GVFG) will increase from € 332 million to € 665 million in 2020, and to € 1 billion from 2021. A further increase to € 2 billion is planned for 2025. As of 2026, this amount will be increased by 1.8 % annualy similarly to the RegG. In addition, more project types are eligible for funding and the Federal Government will provide a greater share of the financing in the supported GVFG projects.
National Platform Future of Mobility
In the Federal Government’s National Platform Future of Mobility (NPM), DB Group is represented in the steering committee, as well as in the working groups for climate protection in transport and digitalization for the mobility sector. Reports commissioned by the Federal Ministry of the Environment, Nature Conservation and Nuclear Safety (Bundesministerium für Umwelt, Naturschutz und nukleare Sicherheit; BMU) and by the German Environment Agency (Umwelt-bundesamt), as well as by the Federal Ministry of Economics and Energy (Bundesministerium für Wirtschaft und Energie; BMWi) published in March 2020, show that the measures taken to date to achieve the climate protection targets for 2030 are making important contributions, particularly in the transport sector, but are not yet sufficient. The NPM will therefore continue to be closely involved in monitoring the implementation of, and further developing, these measures. Against this backdrop, the working group for climate protection in transport is looking into how the measures already taken under the Climate Action Program 2030 can be further accelerated and expanded.
Master Plan for Rail Transport and Rail Pact for the Rail Future Alliance
On June 30, 2020, the second Rail Summit took place at the BMVI. Federal Minister Andreas Scheuer, the Federal Government representative for rail transport, Enak Ferlemann, and representatives of the rail industry signed a pact designed to strengthen the rail sector, and presented the Master Plan for Rail Transport and the target schedule for Germany in sycn.
The master plan is the result of the Rail Future Alliance, as part of which Federal ministry and industry representatives have, over the course of the past two years and in six working groups, examined key challenges in the rail sector and developed concrete fields of action for the future of rail transport in Germany. The objective of the master plan is to attract twice as many passengers to rail passenger transport by 2030 and to shift more freight to environmentally friendly rail while increasing its modal share to at least 25 % by 2030. The key conditions for growth and for a shift to rail will be an increase in capacity with respect to infrastructure, vehi-cles and personnel, the use of innovative technologies and products, and an increase in the attractiveness and competitiveness of rail from the perspective of its users. In order to create these conditions, 32 areas for action and 96 measures were agreed as part of the Master Plan for Rail Transport, including the step-by-step implementation of a Germany in sync schedule for all modes of transport. The implementation of measures is to be continuously monitored by a working group of sector representatives, together with the BMVI, and reported to the steering committee. DB Group is involved in the steering committee and will participate in implementing the measures. Another rail summit has been announced for the summer of 2021.
Railway regulation law
In accordance with the agreements in the coalition agreement, the Federal Government conducted a comprehensive evaluation of the railway regulation regime starting in 2019. To this end, the BMVI initially obtained an experience report from the BNetzA in the application of the Railway Regulation Act (Eisenbahnregulierungsgesetz; ERegG) and sent this to the Federal states and associations for comments in 2019. DB Group participated in this, as well as in a statement procedure carried out in December 2020 on the draft bill for the further development of rail regulation law. The parliamentary proceedings were initiated with the cabinet resolution dated January 20, 2021.
Acceleration of traffic projects
Important traffic projects in Germany will be able to be planned and implemented more quickly in future. This is the aim of another acceleration law which the German Parliament and the Upper House of Parliament (Bundesrat) adopted at the beginning of 2020. Among other things, it is intended that municipalities will be relieved of the cost of building bridges and underpasses to eliminate railway crossings. For replacement structures – in particular, bridges and platforms – the law makes it possible to dispense with approval procedures to a greater extent than previously. In addition, a Measures Law Preparation Act (Maßnahmengesetzvorbereitungsgesetz) stipulates that for eight selected rail projects, the German Parliament instead of Federal agencies will be able to directly grant construction permits in future.
The Investment Acceleration Act (Investitionsbeschleunigungsgesetz) entered into force on December 9, 2020, with publication in the Federal Gazette. For rail, it regulates, among other things, the waiver of plan approval procedures as part of the DSD rollout, the realization of accessible platforms and the construction of walls for noise remediation. Even in the case of individual electrification projects, it should be possible to dispense with planning approval. In addition, the scope for rail projects to avoid regional planning procedures and environmental protection regulations will be increased.
The Planning Assurance Act (Planungssicherstellungsgesetz) was also adopted in May 2020 for a fixed term until the end of March 2021. Its aim is to ensure that approval procedures with public participation can be carried out without significant delays, even under the challenging conditions presented by the Covid-19 pandemic. Its measures include the possibility of online consultation.
Structural Reinforcement Act for Mining Regions
On July 3, 2020, the German Parliament and the Upper House of Parliament (Bundesrat) passed the Structural Reinforcement Act for Mining Regions (Strukturstärkungsgesetz Kohleregionen). It entered into force on August 14, 2020. The legal framework has been created for granting financial aid for capital expenditures and further measures of up to € 40 billion by 2038 in the former mining regions. The Structural Reinforcement Act includes, among other things, capital expenditures in 40 rail infrastructure expansion projects. Twelve of the measures were included in the Measure Law Preparation Act. It also includes the possibility of supporting the expansion of a vehicle maintenance depot in Cottbus.
Legal basis for compensation payments for level crossings
In June 2020, the German Parliament and the Upper House of Parliament (Bundesrat) approved an amendment to the General Railways Act (Allgemeines Eisenbahngesetz; AEG), which extends the regulations relating to compensatory payments to Federal railways. This will provide a legal basis for compensation payments relating to the operation and maintenance of level crossings for all public railways, with retroactive effect from January 1, 2018.
Master Plan for Rail Freight Transport
The implementation of the Master Plan for Rail Freight Transport will continue as per the procedure thus far in order to supplement the work of the Rail Future Alliance. Important issues from the Master Plan for Rail Freight Transport are also included in the Master Plan for Rail Transport. The first-time funding of the Federal program Future Rail Freight Transport in the 2020 Federal budget, amounting to € 30 million, provides the basis for helping to fund projects in the areas of digitalization, automation and vehicle technology. The funding guideline was published on May 20, 2020. As a further measure to strengthen rail freight transport, facility price support of € 40 million was assigned in the Federal budget 2020, which will be increased to € 80 million in 2021. The funding guidelines were concluded in Brussels and published in November 2020.
As the steering committee of the Master Plan for Rail Freight Transport, the rail freight transport round table meets semi-annually with the participation of DB Group. In 2020, in addition to the further implementation of the master plan, the focus was on the economic situation of rail freight transport against the backdrop of the Covid-19 pandemic and the ability to transport semi-trailers by crane in combined transport.
Implementation of the national Rail Noise Protection Act
Since the timetable change in 2020/2021, the Rail Noise Protection Act has generally prohibited the use of noisy freight cars on the German rail network. For the implementation of the law, DB Netz AG has updated the rail network terms and conditions of use. In a formal notice to the Federal Government, the European Commission expressed its opinion that the Rail Noise Protection Act contradicts EU law and that it considers the act to be in breach of interoperability requirements. The process has not yet been completed. In its letter dated November 23, 2020, the BMVI confirmed the regulation’s effectiveness and asked train operating companies (TOCs) to comply with the requirements. At the same time, the BMVI stated that, for a limited time, violations will not be penalized for the 2020/2021 timetable period.
Telecommunications signal supply throughout rail routes
The focus is currently on implementing the supply requirements from the 5G auction in 2019. By late 2024, all rail routes should be provided with a cell phone signal. As per the auction conditions, the railways are asked to cooperate with respect to the provision of coverage along the rail routes. To fulfill this obligation to cooperate, DB Group has initiated the rail connectivity master plan project with the aim of identifying the call phone companies’ needs for cooperation and offering targeted actions for each. DB broadband GmbH is also contributing to the collaboration, with its extensive offer of fiber-optic capacity along the rail routes. By December 20, 2020, the European Electronic Communications Code was obliged to have been implemented under the National Telecommunications Act. A draft bill from the Federal Government is now available and is in the process of parliamentary approval. The TKG amendment could have an impact on the scope and conditions of participation by DB Group.