Deutsche Bahn bosses pick up bonuses as passengers suffer

In the wake of the GDL railroad union's most recent strike for better wages and working conditions, a report has emerged claiming that the top management of Germany's rail operator, Deutsche Bahn, will apparently receive bonuses totaling almost €5 million ($5.4 million) for 2022.

This was divulged on Monday by public broadcasters NDR, WDR and daily Süddeutsche Zeitung who said they had access to Deutsche Bahn's long-term calculation model for bonuses.

Bonuses are meant to be an award for good performance. But many long-suffering rail customers will be scratching their heads in amazement and wondering how that's possible, given Deutsche Bahn's long list of problems.

The trick, it appears, is to offset areas in which targets have been missed against other areas in which targets have been exceeded. It means the basic salaries of the nine members of the executive will rise from a total of around €4 million to around €9 million in 2022.

According to the report, Deutsche Bahn only slightly exceeded its own targets in the area of "women in leadership and employee satisfaction" in 2022. However, the bonus was up by 175%, says the report. The executive board members stand to rake in around €1.6 million for this target alone.

The documents also show that Deutsche Bahn exceeded its self-imposed target for CO2 savings by 2%, the investigative network reported. CEO Richard Lutz, for example, is said to have received almost €440,000 in bonus payments.

Railway glitches don't affect bosses' income

According to the report, the bonus system looks set to be revamped next year. Deutsche Bahn board members would then receive a higher proportion of their salary as a fixed salary, while the proportion of bonuses would be reduced.

Deutsche Bahn's supervisory board, which includes federal government and trade union representatives, sets the parameters of the bonus system.

In future, meeting targets will have less relevance for the rail bosses' salaries. Whether a train is running late, is canceled or overbooked will also have less of an impact. Other problems like trains stopping "indefinitely" mid-route, air conditioning systems failing in midsummer or the app failing to show alternatives and delays will play less of a role in determining their salaries.

Germany's national train system has a lot of room for improvement, not least concerning the punctuality of long-distance trains. Last year, every third train was more than six minutes late. The situation was better on regional services, where just under a tenth of regional trains failed to reach their destination on time.

The issue of trains not running on time is a major grievance for passengers. Factoring in delays means they must adapt their travel plans accordingly to avoid missing connecting trains or appointments. That puts off a lot of potential passengers, at a time when Deutsche Bahn needs to find ways of squaring the circle to attract more customers and increase train freight volume if it wants to achieve its climate targets by 2030.

Deutsche Bahn: Too little investment

"Today's unpunctuality is the result of 20 years of misguided transport and rail policy," said Christian Böttger, professor of industrial engineering at the Berlin University of Applied Sciences. In the last 20 years, investment in rail infrastructure has been cut back, while at the same time more trains have been running.

"The network is simply overloaded," said Böttger. In contrast to Luxembourg and Switzerland, which invested around €575 per capita and €450 per capita in rail infrastructure respectively, the figure in Germany is just €114.

For the majority of Germans, mobility means traveling by car, and that guides politicians' policies.

In addition, for the past 15 years Deutsche Bahn has steadfastly maintained that its rail network infrastructure is in good working order. A recent report, however, struck a different tone, observing that the network was "old" and "prone to faults."

"That's a huge scandal," said Böttger. "The federal government has spent millions to check these figures again and has always confirmed that the network is in a great condition."

He points out that there is no inquiry committee and that no one is asking whether the management and supervisory boards should be held accountable.

In an effort to improve its image, Deutsche Bahn is planning a refurbishment program worth billions of euros, with the aim of restoring heavily used sections of the rail network. Ultimately, Deutsche Bahn wants to have a high-performance network in place by 2030. This would involve improving 40 routes to ensure more reliability and a higher frequency of trains.

Deutsche Bahn refurbishment by 2030

"We are now facing a historic turning point," said Pro-Rail Alliance, a nonprofit advocacy organization for the improvement of rail transport. The government coalition in Berlin wants to significantly increase investment in rail infrastructure in the budget for 2024.

"There is significantly more money than before; that is the good news," said Böttger. However, a large part of this money is needed to mitigate the impact of high inflation, he added.

In addition, the government had promised an extra €45 billion by 2027 "and now only around half is being provided by the federal government from the budget and climate protection fund," said Böttger.

The money will be used to renovate the high-speed railway lines, but will not be enough to build new lines. Böttger does not expect these measures to improve punctuality, as they don't tackle the basic problem of overloaded networks.

The government has earmarked €90 billion as a priority to build new lines. In addition, a further €50 billion are needed for the so-called Deutschlandtakt, a project that would connect Germany's major cities with trains running at least every hour. Another €30 billion would have to be pumped into freight transport, which has long been running a deficit.

"But there is no overview of the actual figures," said Böttger. "And I don't think the government wants there to be an overview either, because the result would be somewhat embarrassing, as it would show that the political goals are not financially viable."

To make matters worse, there are not enough planners and construction companies to carry out the refurbishment work, he added.

Is Deutsche Bahn too big?

For years, experts have recommended splitting up Deutsche Bahn so that the rail network and operations are managed by different companies.

However, Transport Minister Volker Wissing, of the neoliberal Free Democrats, is not impressed by the idea. He's planning a new infrastructure company which would focus on the maintenance and expansion of the rail network separately from rail operations. This company is due to start work on January 1, 2024.

Other countries, such as the Netherlands, Denmark, Sweden and the UK, have found a way to make the separation of network and operations work. "But it's not a magic solution," cautioned Böttger.

Rail customers should not expect an improvement in rail travel anytime soon. On the contrary, things will get worse before they get better, as busy routes will have to be shut down completely at times for maintenance and refurbishment.

"In view of the list of problems and the visible solutions, I doubt that the railroad's accumulated problems can really be resolved in the next 10 years," said Böttger.

This article was originally written in German.

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