Rail crisis: billions in subsidies, but no end to the price spiral!

Rail crisis: billions in subsidies, but no end to the price spiral!

Deutsche Bahn has been criticized for years. Customer frustration due to delays and cancellations is high. Although a lack of investment is often assumed to be the main cause, a current study by the Ifo Institute shows a different picture. According to the researchers, the condition of the rail network is not as dilapidated as is widely assumed. Nevertheless, the railway is confronted with massive price increases, which have recently caused a lot of excitement.

One of the central results of the study is the finding that the price increases for rail journeys and renovations cannot be entirely explained by external factors such as the Ukraine crisis or the corona pandemic. Felix Berschin, the study author, suspects that the increases are mainly caused by an overabundance of retrievable money. In recent years, state subsidies for Deutsche Bahn have increased by over 300 percent. Construction volume, on the other hand, has only increased by 21 percent, raising questions about the efficiency and distribution of funds.

Causes of the price explosion

Consumers are suffering from the high price increases, which have been criticized by consumer advocates for years. These price increases are often presented as a direct result of economic conditions, but surveys show that the additional costs cannot be fully explained by normal cost factors such as inflation or increased energy costs. Berschin estimates that the influences of Corona and the Ukraine conflict only account for 60 to 70 percent of the increased prices.

The railway infrastructure seems to have improved to some extent. Internal reports confirm an improvement in the condition of tunnels and tracks, while the study found a slight deterioration in bridges. This perspective leads to the assumption that the current delays are not directly related to dilapidated infrastructure. In fact, management failure is suspected to be the underlying cause of the inadequacies.

Political and economic implications

The experts also point to clever lobbying by the DB Group, which may be used to mobilize more state resources. In this context, the Federal Court of Justice has indicated that the railway is pursuing a strategy to hide the actual wear and tear and thus justify the need for additional investments. Critics express concerns that the existing investments often do not lead to a real general renovation.

Overall, the situation at Deutsche Bahn shows a complex interplay of political and economic factors. Jörg Krämer, chief economist at Commerzbank, warns that further additional spending could be wasted in construction prices. The demand for a change in management is becoming increasingly louder in order to bring a breath of fresh air into the ailing organization.

Deutsche Bahn is therefore faced with the challenge of increasing the efficiency of its investments while at the same time ensuring the satisfaction of its customers. The pressure is growing to communicate the high prices and lack of improvements more clearly and to reveal the actual challenges. While the condition of the rail network has improved, it remains to be seen whether Deutsche Bahn can make the necessary changes.