It has been more than 30 years since the landmark 1994 reform. Yet state-owned Deutsche Bahn AG (DB) still lacks a coherent ownership strategy. No federal government has managed to agree on how much rail the country actually needs – and at what cost. The absence of political guidance allowed dreams of a universal transport conglomerate to flourish at DB headquarters, leading to costly adventures beyond its core business and home market. At the same time, the lack of a clear strategy under successive CSU transport ministers in the Merkel era resulted in massive underfunding. The dire state of today’s rail infrastructure in Germany has clear causes.

The previous coalition government had already sharply increasing investment. But despite repeated announcements, the SPD/Green/FDP coalition also failed to present an ownership strategy. The new Transport Minister Patrick Schnieder (CDU) has promised to make up for this rapidly, and intends to publish a set of key points for another reform process at the end of September.

However, his decision to oust DB CEO Richard Lutz before both the strategy and the new management team were in place – the sequence was supposed to be the other way around – is already fuelling doubts about whether a more coherent rail policy can really be expected under the new CDU/CSU/SPD government. Sending the company into a leadership vacuum during a sensitive restructuring phase (with only an acting CEO, and a CFO position vacant for months) is certainly not a promising start.

Ending this vacuum in both strategy and leadership has become urgent. Over the next few years, the government will channel more money into the rail network than ever before – more than 100 billion euros by 2029. Deutsche Bahn is by far the biggest beneficiary of the infrastructure special fund. That is why not only the Monopolies Commission is right to warn that, without fundamental structural reform, these billions risk being invested inefficiently, or disappearing into opaque intra-group financial flows.

The most important step toward greater accountability, fewer conflicts of interest, and stronger oversight would be to finally separate infrastructure and operations in terms of ownership. One can call it a break-up, or less dramatically, an unbundling – a reform that has been debated controversially for years. Rarely has there been a better moment to pursue it.

Former transport minister Volker Wissing (FDP) did make a first move, albeit a half-hearted one: in early 2024, the public service infrastructure subsidiary DB Infrago was launched, taking over the track network and stations. Yet the financial and personnel entanglements with the rest of the group were left intact. Unsurprisingly, the Federal Audit Office levelled sharp criticism, as the federal government, despite being the owner, was granted little real influence, let alone control. Whether much will change under the CDU/CSU/SPD coalition is doubtful. The CDU/CSU’s earlier break-up ambitions have been heavily watered down in the coalition agreement. The SPD, for its part, remains aligned with the unions, which strongly oppose any split.

The fact that both the financial and scheduling plans for the general overhaul of the rail network, launched only a year ago, are already slipping, is another alarm signal that Deutsche Bahn’s problems go far beyond the need for a capable CEO. What is required is clear accountability and political leadership. The special fund is a once-in-a-lifetime opportunity for the state-owned group. One can only hope that Berlin now sets the right course.