Tuesday 21 January 2020

German federal government and DB sign the railway network’s largest modernisation programme to date

Ten years of planning certainty - Customer benefits - Foundation for active climate protection in the transport sector

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The foundation for #strongrail in Germany: a record 86 billion euro will be invested by 2030 in maintaining and modernising the existing railway network. These funds will be used to modernise railway lines and stations, signal boxes and energy supply systems.

The new performance and financing agreement (LuFV III) was signed by German Federal Transport Minister Andreas Scheuer, CEO of Deutsche Bahn AG Richard Lutz and Deutsche Bahn Board Member for Infrastructure Ronald Pofalla on 14 January 2020, in the presence of German Federal Minister of Finance Olaf Scholz.

The German federal government will contribute 62 billion euro to the programme, while DB will provide 24 billion euro of its own capital. On average, 8.6 billion euro will be available for replacement investments and maintenance for each year of the programme. This represents an increase of 54 per cent compared to the previous planning period.

Investment in railway infrastructure will increase by 54 per cent this decade.

German Federal Transport Minister Andreas Scheuer: “The wow effect is coming. The 2020s will be a golden age for the railways. We are signing off on the largest modernisation programme ever seen in Germany. Our goal: a strong railway system; a high-performance, high-quality network as a foundation for active climate protection in the transport sector. We are replacing outdated facilities, creating barrier-free access and improving site management and the condition of our railway bridges - our passengers will draw maximum benefit from this”.

German Federal Finance Minister Olaf Scholz: “Investment is a priority for this federal government. We are investing at record levels to get Germany in shape for the future. The same goes for Deutsche Bahn. With the largest investment programme in the history of DB, we are creating a long-term and reliable investment perspective for modern and climate-friendly rail mobility”.

DB CEO Richard Lutz: “We are well prepared for the decade of the railways. Infrastructure is the foundation not only for growth and modal shift, but also for good operational quality and high levels of punctuality. With this new performance and financing agreement, we can tackle the investment backlog and fundamentally modernise the infrastructure. This will make the rail network more robust and reliable, and stations more attractive”.

DB Board Member for Infrastructure Ronald Pofalla: “We are really strengthening the railways. The new performance and financing agreement provides a foundation for better quality and stability in rail transport. It marks the beginning of a comprehensive campaign to modernise the German rail network at an unprecedented scale. We are working closely with the construction industry. Together, we can make plans over a much longer period, thereby safeguarding capacity - that’s a huge plus. The additional funds being provided will also ensure capacity-friendly construction and will reduce the impact of construction on railway operations and on our customers”.

Performing and Financing Agreement III (LuFV III)
The performance and financing agreement provides, in particular, for replacement investment in the existing railway network and defines qualitative parameters and penalties for non-compliance. The programme will run for a ten-year period - twice the duration of its predecessor, the LuFV II.
Both the German federal government and DB are significantly increasing their contributions. DB’s infrastructure manager will also provide around 24 billion euro for investment and maintenance, representing a 44 per cent increase. In addition, its dividend payments will be reinvested in full.
Part of the investment will go toward renewal of around 2,000 kilometres of track and 2,000 switches annually. Around 2,000 additional railway bridges will be renewed in total over the decade, and around seven billion euro will be invested in signalling alone.

The programme will run over a ten-year period, ensuring greater planning certainty for DB and for the economy and enabling future-proof capacity development by construction and planning companies, as well as long-term agreements with suppliers. This serves as an incentive for greater capacity and innovation in the railway construction sector.

Customers will benefit directly, for example, from improved accessibility and better protection from the weather on platforms. Money is also being made available to ensure that the impact of construction works on railway transport and customers is minimised. Measures to ensure capacity-friendly construction will include temporary bridges and additional switches and signals to provide greater flexibility. New converters will enable feed-in of energy from renewable sources on the traction power network.

The performance and financing agreement is subject to complete transparency and control. The German Federal Railway Authority will oversee implementation of the agreement, and 17 criteria to measure the success of the agreement have been agreed. DB will be required to pay fines if it fails to meet the requirements of the contract. Quality indicators will be used to document the condition of the network - how many bridges have been renovated, the amount of money being invested in maintenance, and much more.

The full Performance and Financing Agreement III can be viewed at www.bmvi.de

(Source: DB)

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Investment in railway infrastructure will increase by 54 per cent this decade © DB