Page "Transport in Germany" Paragraph 30

There are significant differences between the financing of long-distance and short-distance ( or local ) trains in Germany.

While long-distance trains can be run by any railway company, the companies also receive no subsidies from the government.

Local trains however are subsidised by the German states, which pay the operating companies to run these trains.

This resulted in many private companies offering to run local train services as they can provide cheaper service than the state-owned Deutsche Bahn.

Track construction is entirely and track maintenance partly government financed both for long and short range trains.