The Railway and Transport Union (EVG) has accused Federal Transport Minister Patrick Schnieder of sabotaging Deutsche Bahn's long-distance rail services.

According to EVG chairman Martin Burkert, the CDU politician halted urgently needed track usage subsidies at the last minute, as stated in his speech in Fulda on Thursday. The state-owned company Deutsche Bahn would have benefited the most from this support, but competitors would have profited as well. "This is hypocritical policy," Burkert said. Schnieder claims to want more satisfied rail customers but then fails to provide the necessary funding.

According to the EVG, the issue at stake this year involves EUR105 million to support long-distance rail and EUR85 million for freight transport. Burkert noted that the Ministry of Transport has not explained its reasons for stopping the subsidies. The federal government subsidizes the use of the rail network because it shares responsibility for the significant cost increases in recent years. Without subsidies, transport operators must bear these costs themselves.

A spokesperson for the Ministry of Transport referred to concerns raised by the Bundestag's Audit Committee. "For this reason, the Ministry of Transport will no longer apply the existing subsidy guidelines, which are valid until 30 November 2025, for the year 2025. Work is currently underway at full speed on new guidelines to provide a legally secure solution to curb track price increases in long-distance rail from 2026 onwards."

UNIONS AND INDUSTRY: CARGO SUBSIDIES ARE ESSENTIAL

In a joint paper by the EVG, other unions, and several corporations including BASF, Bayer, and Thyssenkrupp, the call is made for adequate subsidies for rail freight transport. With an eye on the 2026 federal budget, which will be debated in the Bundestag next week, the paper states: "If subsidies for rail freight transport are not substantially increased, numerous high-volume shipping locations and thousands of jobs will be at risk." The track usage subsidy for freight should be raised to at least EUR350 million, and for long-distance rail to at least EUR200 million.

The paper notes that the cost of using the rail network will rise by 16 percent for freight and 18 percent for long-distance rail in 2025. The legislative change planned by Schnieder offers no immediate relief but will at least prevent even higher track price increases in the future. Without sufficient compensation, so-called single wagonload traffic by DB Cargo--the freight division of Deutsche Bahn--faces extinction. This would jeopardize the industry's connection to the rail network. Single wagonload traffic is particularly important for the steel sector, but it has high fixed costs and is loss-making for Deutsche Bahn. In this area, individual freight wagons are collected directly from corporate customers and assembled into long trains at marshalling yards.

Thanks largely to EVG's efforts, steel executive Bernhard Osburg will become the new head of DB Cargo. Osburg previously served for about three years as CEO of Thyssenkrupp's steel subsidiary. EVG chairman Burkert stated that the reboot at DB Cargo will not be easy. "Let's not kid ourselves. Cargo is a crisis case." Simply changing the executive leadership is not enough, he said. The customer must once again become the focus. This will require more staff in customer-facing roles.

(Report by Christian Krämer, edited by Christian Gotz. For inquiries, contact our newsroom at berlin.newsroom@thomsonreuters.com (for politics and economy) or frankfurt.newsroom@thomsonreuters.com (for business and markets).)