Brussels, 25/10/2007 (Agence Europe) - On Tuesday 23 October, the European Commission decided to launch a formal investigation procedure into possible overcompensation of Deutsche Bahn AG by the German federal states of Berlin and Brandenburg for public service contracts over the period 2002-2012.
According to the Commission, which for more than three years examined the counter law suite to a complaint submitted by one of DB's competitors, several elements appear to suggest overcompensation. Firstly, the contract provides for compensation calculated on the basis of a single rate per kilometre. The rate applies in respect of the number of kilometres covered with no reference to ticket sales revenue. The Commission explained that the contract does not contain a clause for the single rate to be reviewed. In a press release published on Tuesday the Commission explained that some lines, which on a purely commercial basis would seem to be those sustaining the greatest losses, will be taken out of the contract by 2012 (and opened up to competition by tendering), but the compensation rate per kilometre will not be reviewed when this happens. The contract also allows Deutsche Bahn AG to raise ticket prices, again without this action triggering a review of the compensation rate. Lastly, the federal states concerned conducted their negotiations on the compensation rate without being able to compare Deutsche Bahn's proposal with the fares it charges in other federal states. Some evidence also suggests that, during its negotiations with the federal states, Deutsche Bahn included matters not related to the contract such as the upkeep or construction of maintenance facilities and the renovation of railway stations or the construction of new stations. DB spokesman, Bernard Weiner, informed EUROPE that, “we are going to cooperate with the Commission” but also affirmed, however, that this is a case that only involves the regions concerned and the Commission.
The Commission decision comes at a crucial moment in the highly politicised debate on the privatisation of this 100% state owned company and hinges upon state control of local rail traffic and access to infrastructure. The most recent government proposal, while awaiting a second reading by parliament, includes the partial privatisation of DB (according to the German constitution, capital share by private companies cannot exceed 49%) in mid-2008 at the latest with the sale during the first phase of 20%-25% of shares. Infrastructure for the time being, is expected to remain under the sole control of the state but DB could begin privatisation infrastructure privatisation in 15-20 years. There would then be an assessment report on the basis of which the government would then decide how operations would then follow. Following losses in 1993, after the merger of the West and East German railways (estimated to be around 42 million German marks per day), recent years turned out to be positive for DB and in 2007 they had a record income estimated to be around €2.4bn. (A.BY.)