Yahoo Finance German rail upgrade raises supply chain fears
BERLIN (Reuters) - German makers of specialty chemicals used in anything from animal feed to vaccines urged national rail company Deutsche Bahn to secure vital arteries for logistics, saying planned engineering work could exacerbate supply chain problems.
Beginning in June, Deutsche Bahn plans to overhaul some of the country's most congested rail corridors, with around 4,200 kilometres (2609.76 miles) of track flagged for renovation work by 2030.
The country, Europe's largest economy, has faced criticism for inadequate infrastructure and environmental campaigners have warned inaction could thwart targets to curb carbon emissions.
But industrial users say they need to be involved in the planning of work to avoid making matters worse while it takes place.
"We see ... the massive danger that rail in particular as a reliable, plannable and sustainable mode of transport is threatening to fail almost completely," the VCI chemicals association said in a letter, seen by Reuters, to the state transport minister of North Rhine Westphalia, Germany's industrial heartland.
The state transport ministry confirmed to Reuters that it was in touch with the VCI.
Specialty chemicals company Evonik, whose products are used in items from animal feed and diapers to COVID-19 vaccines, said production sites would have to limit output or even shut down if they did not have reliable delivery options.
Germany "cannot run on a second-class rail network," Arndt Selbach, plant manager at Evonik Wesseling, said. "That's why we say 'yes' to renovation, but it must be organised sensibly and in dialogue with freight customers."
Rival BASF, however, welcomed the investment in rail infrastructure and said that although construction work was expected to cause delays, cooperation with the operator's DB Netz subsidiary was going well.
A spokesperson for Deutsche Bahn said the rail operator was in touch with companies and industry bodies.
"Industry supply security of course plays a large role in our planning for general renovation of track sections that are under high stress," it said.
(Reporting by Matthias Inverardi, Writing by Rachel More, Editing by Friederike Heine and Barbara Lewis)
