All Aboard

Germany’s national rail operator Deutsche Bahn is facing the biggest modernization in its history. This bold endeavor will create a range of opportunities for foreign railway equipment suppliers and construction companies.

June 2020

Deutsche Bahn (DB), Germany’s state-owned railway company, is planning major renovation and construction projects, purchasing new trains and digitalizing the entire rail system as part of a major effort to modernize and expand the country’s railway infrastructure. In 2019 alone, DB invested EUR 11 billion, and in January 2020, the company and the German government committed to spending an additional EUR 86 billion by 2030.

Deutsche Bahn is unveiling a long-distance, multisystem electric locomotive to pull passenger coaches within Germany and across borders. The ECx system will be built by the Spanish firm Talgo. The framework agreement is for 100 locomotives. Pictured: a digital simulation of the engine. © Deutsche Bahn AG / Tricon AG

Growth in long-distance travel

More long-distance passengers in Germany chose to travel with DB last year than ever before, and the company is keen to ensure that trend continues. The government is supporting the rail operator as a clean alternative to air travel and has approved EUR 62 billion in funding over the next decade. “Taking the train is a form of active climate protection – rail is the only truly green mode of transport,” DB’s CEO Richard Lutz says. “We are well on our way towards the target of more than 200 million long-distance passengers by 2030.”

The volume of investment represented a 54 percent increase over the previous ­administrative period. Part of the money will be used to renew around 2000 ­kilometers of tracks and 2000 switching points every year.

“The record size of this investment – plus the scope of areas it involves – will offer a wealth of opportunities for foreign companies as well as German firms to get involved,” says Germany Trade & Invest (GTAI) transportation expert Stefan Di Bitonto.

growth sector


Total investment in the sector by 2030 by the government and DB

Foreign investors get on board

The massive investment and expansion plans are creating exciting opportunities for foreign companies, explains Christian Böttger, professor at Berlin’s University of Applied Sciences (HTW) and an expert on the rail sector. “Germany will invest more in public transport in the years to come, and Deutsche Bahn has already been extending its supplier base internationally over recent years, as other German rail operators have,” says Böttger.

Deutsche Bahn’s biggest expansion project encompasses the federal states of Hessen, Baden-Württemberg, Rheinland-Pfalz and North Rhine-Westphalia. The EUR 4 billion endeavor, which includes tunnel extensions and major track expansions, will start construction this year and be completed in the 2040s. Upgrades to and new construction on the Hamburg/Bremen–Hannover line will also commence this year at an estimated cost of EUR 3 billion. Another big construction and upgrade project will be the Hanau–Würzburg/Fulda–Erfurt lines in the 2030s.

Participating suppliers include railway vehicle manufacturers like Spanish firms Talgo and CAF, Canada’s Bombardier, Pesa in Poland, Switzerland’s Stadler Rail, Czech group Škoda Transportation, Russia’s United Wagon Company and China’s CRRC. “Germany is more open to international suppliers than many other countries are,” Böttger says.


Total investment from DB in 2019 to improve capacity, network efficiency and infrastructure

Spanish manufacturer Talgo signed a major agreement with DB for up to 100 multisystem locomotives and passenger wagons, valued at EUR 2.3 billion. Talgo is to begin delivery of its first EUR 550 million order of 23 new long-distance trains, known as the ECx, in 2023. “For Talgo, signing this contract is not only a great honor, it also brings great responsibility,” says Talgo CEO José María de Oriol Fabra. “We will be delivering the best product to one of the most demanding customers in the world: Deutsche Bahn.” The DB deal helped propel Talgo’s new orders in the first half of 2019 to EUR 804 million – a level the Spanish company describes as “historic.”


Annual number of long-distance passengers DB anticipates it will be carrying beyond 2030

Sources: Deutsche Bahn; German Federal Government

Opportunities for growth

Foreign companies are likely to find openings in other areas, such as civil engineering, railway signaling and electrification. Germany is aiming to equip its entire rail network with the European Train Control System (ETCS) and digital signaling technology. While this area is largely dominated by Siemens, the French group Thales is well positioned, and growing investment in the sector could lure other foreign players like France’s Alstom, Italy’s Ansaldo and Canada’s Bombardier. There’s also increasing competition from Chinese players, says Böttger.

The boom in Asian tourism to Germany is also creating investment opportunities. Ctrip Group, China’s largest travel service provider, signed an agreement with DB last year to enable the sale of tickets on its multilanguage platforms. “Through our partnership, we are enabling our 300 million members to conveniently purchase German rail tickets, supporting travelers to discover all corners of Germany,” says Ctrip Group general manager Amy Wei. With new infrastructure, digital transformation and ambitious plans supporting millions more passengers over the next decade, Germany’s railways are charging “full steam ahead” – only this time with clean ­energy.