Infrastructure finance and law today: from the Gotthard syndicate to the railway fund

Public funds in place of private capital

The financing of the NRLA reversed the structure of 1869. The original Gotthard railway was built by a private company with CHF 102 million of market capital and CHF 85 million of grants from three states. The base tunnels of 2016 and 2020 were financed entirely with public money from a special fund of the Confederation, without private equity and without foreign subsidies. The vote of 29 November 1998 created the constitutional basis for the fund for major public transport projects (FinöV-Fonds). It assigned to the fund up to two thirds of the revenue of the performance-related heavy vehicle fee, part of the mineral oil tax, the proceeds of a VAT increase of 0.1 percentage points and, for a transitional period, advances from the federal treasury that the fund was to repay with interest.¹ The transitional provisions of the Constitution still list the four projects that the fund financed: the NRLA, Rail 2000, the connection of eastern and western Switzerland to the European high-speed network and noise protection along railway lines.²

On 9 February 2014 the people approved, with 62 per cent, the Federal Decree on the financing and expansion of railway infrastructure (FABI). It replaced the temporary FinöV fund with a permanent Railway Infrastructure Fund (Bahninfrastrukturfonds, BIF), which since 1 January 2016 finances both the operation and maintenance and the expansion of the railway network.³ Under Art. 87a of the Federal Constitution the Confederation bears the principal burden of financing railway infrastructure, and the fund receives at most two thirds of the heavy vehicle fee, the revenue of a VAT increase, 2 per cent of the direct federal tax on individuals, a fixed annual contribution from the general federal budget of CHF 2.3 billion (indexed) and contributions from the cantons.⁴ The details are regulated in the Federal Act on the Railway Infrastructure Fund (BIFG, SR 742.140).⁵

The figures show the scale. In 2023 the BIF received CHF 5.73 billion: CHF 1,007 million from the heavy vehicle fee, CHF 713 million from VAT, CHF 262 million from the mineral oil tax, CHF 266 million from the direct federal tax, CHF 606 million from the cantons and CHF 2,875 million from the federal budget. It spent about CHF 3.1 billion on the maintenance of the existing network alone. The advances inherited from the FinöV fund, which had financed the NRLA, still amounted to CHF 5.1 billion at the end of 2023. Since 1 January 2019 the fund must use half of its earmarked revenues for their repayment. In effect, the base tunnels were financed by a public loan that is repaid from road freight charges and consumption taxes, the reverse of the 1871 structure in which private bondholders lent to a company and states supplied the grants.

Notes

1. Swissvotes, vote no. 445 (as above). ↩
2. Federal Constitution, Art. 196 no. 3 (transitional provision to Art. 87), English text at droit-bilingue.ch, https://www.droit-bilingue.ch/en-de/1/10/101-196-233.html. ↩
3. Swissvotes, short description of vote no. 578 (9 February 2014), https://swissvotes.ch/vote/578.00/kurzbeschreibung-de.pdf. ↩
4. Federal Constitution, Art. 87a, English text at droit-bilingue.ch, https://www.droit-bilingue.ch/en-de/1/10/101-87a-104.html. ↩
5. Swiss Federal Audit Office (SFAO/EFK), Umfassender Bericht über die Prüfung der Rechnung 2023 des Bahninfrastrukturfonds, EFK-23700, 8 April 2024, https://efk.admin.ch/wp-content/uploads/publikationen/berichte/wirtschaft_und_verwaltung/ oeffentliche_finanzen_und_steuern/23510-23363-23700/dt/23700be-umfassender-bericht-bif-v04.pdf, citing the BIFG as SR 742.140. ↩

For general information only. This article does not constitute legal or tax advice, does not replace advice on an individual case and creates no lawyer-client relationship. It reflects the legal position as of August 2025.