The regulatory framework that shapes rolling-stock financing

Regionalisierungsgesetz (RegG)

The RegG is the federal law that finances SPNV. It transfers the Regionalisierungsmittel from the federal budget to the Länder, subject to a statutory dynamisation formula. For rolling-stock financing, three features matter: (i) the volume and its dynamisation set the ceiling for PTA-side long-term vehicle commitments; (ii) the purpose restriction determines what can and cannot be funded; and (iii) the federal-Länder balance has been politically contested in every recent cycle (most recently in the 2024/2025 increase). The RegG is the silent parameter behind every Landesanstalt model.

The Fourth Railway Package

The Fourth Railway Package is the single most consequential EU legislative block for the present-day SPNV regulatory framework. Adopted in 2016 in two waves — a technical pillar on 11 May 2016 and a market pillar on 14 December 2016 — it comprises three Regulations and three Directives that together recast interoperability, safety, the European Union Agency for Railways (ERA) and the market-opening regime for domestic passenger services.

Technical pillar. Directive (EU) 2016/797 (interoperability recast) and Directive (EU) 2016/798 (safety recast), together with Regulation (EU) 2016/796 on the ERA, transfer vehicle authorisation and single safety certificates from the Member States to the ERA through the One-Stop-Shop (OSS). The procedural detail sits in Implementing Regulation (EU) 2018/545 (vehicle authorisation) and Implementing Regulation (EU) 2018/763 (single safety certificates). For rolling-stock investors the practical consequence is that a vehicle authorisation, once issued, has a defined cross-border effect, and that the TSIs — consolidated and tightened by Implementing Regulation (EU) 2023/1694 — are the binding yardstick for what a vehicle is legally allowed to do over its service life. See TSI & vehicle authorisation below.

Market pillar. Regulation (EU) 2016/2338 amended Regulation (EC) 1370/2007 to make competitive tendering the default for domestic rail passenger services and to abolish, from 25 December 2023, the unconditional direct-award option under the old Article 5(6). Directive (EU) 2016/2370 amended Directive 2012/34/EU to tighten the governance of vertically integrated infrastructure managers (essential-functions independence, dual-function prohibitions, inter-company loan restrictions and a dividend-flow rule). See PSO framework and Market access.

The new direct-award carve-outs. While competitive tendering is the default, Regulation 2016/2338 retained and introduced several rail-specific direct-award bases in Article 5 of Regulation 1370/2007 — notably Art. 5(3a) (temporary direct award on extraordinary grounds, max five years), Art. 5(3b) (light competitive procedure for a single respondent), Art. 5(4a) (performance-based direct award, limited to jurisdictions below a defined volume threshold) and Art. 5(4b) (combined infrastructure-manager / operator direct award on networks excluded from full access). Each carries binding publication, reporting and — for performance-based awards — measurable target and sanction requirements under Art. 7. In Germany these provisions must be read alongside the competitive-procedure requirement under § 131(1) GWB, which in practice significantly narrows their field of application (Linke, NZBau 2017, 331).

German implementation. Staebe (EuZW 2018, 146) concludes that the regulatory substance of the Fourth Package was already largely embedded in German law before adoption — in particular through the ERegG (in force 2 September 2016) on infrastructure access, toll regulation and separation of essential functions, and through existing AEG rules on operator safety. The dividend-flow discipline required by Art. 7d of Directive 2012/34/EU is implemented by the federal-government / Deutsche Bahn Finanzierungskreislauf Schiene arrangement rather than by statute; codification in a statute or public-law contract (§ 54 VwVfG) is advisable for legal certainty. See the German implementing overlay.

Why it matters for financing. The Fourth Package shifts residual-value risk calculations in two ways. The OSS-driven vehicle authorisation regime is the formal guarantee that an authorised vehicle can be redeployed across Member States without a new substantive authorisation; the legal vehicle for that guarantee is no longer a patchwork of national decisions but an ERA decision under Implementing Regulation 2018/545. And the new Art. 5 carve-outs, read narrowly, make the internal-operator pathway materially less attractive than the performance-based or single-respondent routes — which in turn shapes how PTA-owned vehicle pools and Wiedereinsatzgarantien are deployed in successor tenders.

Regulation (EC) 1370/2007 — PSO framework

Regulation (EC) 1370/2007 frames public service contracts in SPNV: competitive tendering as the rule — a rule made default by Regulation (EU) 2016/2338 with full effect from 25 December 2023 — defined direct-award carve-outs (the internal-operator exception under Art. 5(2), the low-volume threshold under Art. 5(4) and the rail-specific carve-outs under Art. 5(3a), (3b), (4a) and (4b) added in 2016), and an overcompensation test that is decisive for how capital costs and guarantees flow through a service contract. The Annex to the Regulation governs the compensation methodology and therefore directly constrains how a PTA can recognise a rolling-stock capital cost. Authorities relying on the 2016 carve-outs must also comply with the expanded ex-ante publication, reporting and performance-target requirements under Art. 7 and, for performance-based awards, the five-yearly review duty. The Altmark criteria remain the anchor for distinguishing compatible PSO compensation from notifiable State aid; a single-respondent procedure under Art. 5(3b) in particular does not relieve the authority from the Altmark discipline on the price paid.

EU state aid in the rail sector

Three frames coexist. First, Article 93 TFEU (the sector-specific state-aid basis for rail); second, the 2008 Community Guidelines on State aid for railway undertakings (on the Commission's revision agenda); third, the CEEAG 2022 for environmental aid, which has become the primary vehicle for alternative-drive support. Underlying all of these is the Altmark logic for PSO compensation. In rolling-stock financing, state aid is the discipline on every guarantee, every pool access fee, and every subsidy layer attached to a green-drive premium.

Market access: Directive 2012/34/EU and ERegG

Directive 2012/34/EU (as amended by Directive (EU) 2016/2370 — the market pillar of the Fourth Railway Package) and the German Eisenbahnregulierungsgesetz (ERegG) set access, capacity and charging rules. The 2016 amendments tightened the governance of vertically integrated infrastructure managers: operational independence of essential functions (track allocation and tolls), prohibition of dual functions (Art. 7(3)), inter-company loan restrictions on non-arm’s-length terms and a dividend-flow rule (Art. 7d) under which infrastructure revenues may not leak out of the infrastructure business via a parent. The charging chapter is where track-access pricing meets rolling-stock economics (see also the Trassenpreisbremse case law). The 2023 EU Capacity Regulation proposal, adopted in 2026, overlays a new multi-year capacity-planning regime that directly affects timetable stability and, through it, long-lead rolling-stock orders.

TSI and vehicle authorisation

Vehicle authorisation for placing on the market under Directive (EU) 2016/797 and the ERA One-Stop-Shop (OSS) is the financing industry’s residual-value-risk regulator. The procedural detail for vehicle authorisation sits in Implementing Regulation (EU) 2018/545; for single safety certificates in Implementing Regulation (EU) 2018/763. Both flow from the technical pillar of the Fourth Railway Package. The TSI revision adopted in 2023 (Implementing Regulation (EU) 2023/1694) tightens CCS and energy provisions and extends ETCS Baseline 4 mandates. Transitional regimes, retrofit cost pass-through and the scope of remaining national rules are the practical questions for any investor.

ECM — Entity in Charge of Maintenance

Regulation (EU) 2019/779 consolidated the ECM certification regime across all vehicle types. For a lessor or a PTA vehicle pool, the key interface is between the Keeper, the Railway Undertaking and the Designated Workshops. Recent supervisory decisions have sharpened what a leasing contract must spell out — covenants on ECM changes, audit rights, and the treatment of supervisory findings as events of default.

Luxembourg Rail Protocol (Cape Town Convention)

The Luxembourg Rail Protocol to the 2001 Cape Town Convention entered into force on 8 March 2024 and introduces a uniform international regime for lessor, secured-creditor and conditional-seller interests in railway rolling stock, supported by an International Registry (rollingstockregistry.com) supervised by OTIF. The Protocol operates alongside the PSO and state-aid regimes — it does not change how the Verkehrsvertrag is procured, but it can materially improve the enforceability, priority and insolvency treatment of rolling-stock security. See the dedicated note: The Luxembourg Rail Protocol.

The German implementing overlay

The relevant national acts are the Allgemeines Eisenbahngesetz (AEG), the ERegG, the Eisenbahn-Bau- und Betriebsordnung (EBO), the Transeuropäische-Eisenbahn-Interoperabilitätsverordnung (TEIV) and the Eisenbahn-Sicherheitsverordnung (ESiV). Regulatory oversight is split between the Bundesnetzagentur (market access, charging, capacity) and the Eisenbahn-Bundesamt (safety, authorisations, ECM supervision).

Last reviewed: 18 April 2026.