DVF calls for rapid further decisions on ETCS vehicle retrofitting

Following the decisions of the traffic light coalition on ETCS vehicle retrofitting, the German Transport Forum (DVF) is calling for further steps to be taken quickly by the German government: a federal directive and the financial resources would have to come at the same time. "The budget funds made binding in the commitment appropriations are too low and thus rather send a stop signal," said DVF Managing Director Florian Eck when asked by Rail Impacts. "We are thus still waiting for the funding guideline and the financial resources so that there can be a real ramp-up. Both must come at the same time and with planning certainty for the entire ramp-up phase."

The background to the DVF demands are far-reaching decisions by the German government on the future of the railroads in Germany. In a "modernization package for climate protection and accelerated planning", the traffic light coalition had stipulated, among other things, that up to an additional 45 billion euros would be invested in the mode of transport by 2027. The 16-page strategy paper from the end of March also expressly includes a commitment to promoting ETCS vehicle equipment. It states that this should be "expanded via the ongoing model project in the 'Digital Node Stuttgart' of the Digital Rail Germany (DSD) starter package.

Government funding for ETCS vehicle equipment has long been the subject of discussion in the rail sector and in politics. Market participants such as manufacturers and rail transport companies argue, among other things, that the new train control system means that more and more technology is being transferred from the infrastructure to the vehicles - and that the state therefore has a financial obligation. Until now, it was unclear what the politicians' position would be on this demand. Now, for the first time, the strategy paper commits to state funding.

This development was expressly praised by industry associations. The German Railway Industry Association (VDB), for example, spoke of an "important paradigm shift" in ETCS vehicle equipment. And the Pro-Rail Alliance stated in a statement: "The traffic lights are now clearly committed to financing the digital equipment of locomotives and railcars - even beyond pilot projects. This is a clear directional decision in terms of rail digitization." From now on, the federal government will be responsible not only for modernizing the infrastructure, but also the vehicles.

Praise also comes from the DVF. However, when asked, Managing Director Florian Eck continues: The state must now act quickly with regard to the funding guideline and the provision of financial resources. "Time is running out," Eck said. After all, according to initial scenarios, vehicle conversion should be completed by 2030.

There is a separate title in the federal budget for ETCS/ERTMS. For 2023, 637 million euros have been earmarked and 2.3 billion euros in commitment appropriations, i.e., expenditures earmarked for the coming budget years. However, Eck calculates, "The funds are not sufficient for a targeted ramp-up of signaling technology in infrastructure and vehicles."

In this context, he refers to the McKinsey study on the feasibility of rolling out ETCS/DSTW from 2018. At that time, the consultancy assumed a total financial requirement of 30 to 35 billion euros. Vehicle equipment was estimated at a proportionate €7 billion. "Industry and operators need planning certainty that this ramp-up will now begin in order to plan for capacity at manufacturers and workshops and to convert rolling stock with as little downtime as possible", Eck explained.

DVF advocates a fund solution - as proposed in the final report of the Rail Acceleration Commission at the Federal Ministry of Transport. In this case, the budgetary resources would be earmarked for a specific purpose and could flow out over the course of the year as needed.

Eck told Rail Impacts about the funding guideline: It must take two aspects into account, he said. First, the so-called "first-of-class" conversion, in which a vehicle type is converted to ETCS for the first time. "This is where important experience is gained for the rollout and new ground is broken. That's why full funding of all additional costs of these firstmovers is necessary here."

Secondly, the rollout costs of the RUs would have to be subsidized in the further course, but these will be lower due to the firstmover experience. "It's important to include freight transport here as well, and not just local rail passenger transport, because this is an important growth segment where many locomotives also need to be converted."

In addition, the subsidy measures still have to be examined in terms of state aid law, Eck explained. (gk)