The German economy declined by 5.3% in 2020. The decline was much lower as compared to other European countries, backed by strong fiscal response to recover from the impact of COVID-19 pandemic. While operations of several sectors in Germany were impacted due to COVID imposed lockdown, the infrastructure, residential, and utility construction were exempted from lockdown measures. Despite this, the construction activities in Germany declined by over 9.5% in 2020.
In January 2020, the German government announced to spend US$125 billion (€ 86 billion) to improve its railway network in the next decade. Of these, around €62 billion will be spent by the government and the remaining EUR24 billion will be spent by Deutsche Bahn, a German rail company.
A part of the spending will be directed towards renewing 2,000Kms of tracks and 2,000 switching points every year, and renovation of 2,000 railways bridges by 2030. Also, around €7 billion will be used on signal-box technology with Deutsche Bahn planning to increase its fleet of rapid ICE 4 trains from 39 to 137. This could provide lucrative opportunities for foreign investors.
The 2030 Federal Transport Infrastructure Plan (FTIP) which was developed by Federal Ministry of Transport and Digital Infrastructure lays down the development plan of the Federal Government‘s transport infrastructure in Germany. As part of FTIP 2030, some of the key focus areas will include structural maintenance of the existing networks and elimination of bottlenecks on the major transport junctions as well as key transport hubs.
Of the €269.6 billion funding planned, around € 141.6 billion are earmarked for structural maintenance of the existing networks and € 98.3 billion will be spent on upgrading and new construction projects. Majority of the funding (49% or €132.8 billion) will be directed towards roadways, followed by railways (42% or €112.3 billion), and waterways (9% or €24.5 billion).
The execution of the FTIP 2030 will improve passenger rail services as well as rail freight capacity, and reduce congestion on federal trunk roads. It will also offer cost-effective transport opportunities relating to federal waterways.
Under FTIP 2030, around 2,000 project ideas were submitted by various stakeholders including members of parliament, federal states, the Federal Government, railway infrastructure companies, and other for appraisal. Of these, there were around 1,700 federal trunk roads projects, followed by federal railways (400) and federal waterways (50).
In a quest to make the entire network greener, efficient and reliable, the German government is doubling their annual investment in the rail infrastructure. This will support the growth of the infrastructure construction section in Germany.
Moreover, in September 2020, Fehmarnbelt link, the worlds’ longest immersed rail and road tunnel between Germany and Denmark received approval. The construction of the Fehmarn belt is worth US$7.8 billion.
In Northern Germany, ten new construction projects for logistics and industrial space have been launched. These infrastructure construction projects are expected to support the construction industry going forward.
