#German Parties, Monopoly Commission Seek to Unbundle National Railway Company, #DB

The plan could see DB’s infrastructure split off into a non-commercial public holding company, while regional, long-distance and freight transport operations would remain under one roof.

The Greens and pro-business Free Democratic Party (FDP), which look set to join the Social Democrats (SPD) in Germany’s next coalition government, favour breaking up national railway company Deutsche Bahn (DB) – a move opposed by the SPD. Spiegel reports that the Greens and FDP have discussed the future of DB as part of the country’s transport transition.

Teaming up against the SPD, the Greens and FDP are calling for a fundamental reorganization of the company, which is 100 percent owned by the federal government.

A breakup of DB would benefit smaller competitors already active in Germany, such as the privately owned Flixtrain. Plans under discussion include separating the company’s DB Netze division, which maintains the rail infrastructure, stations and energy supply, from train operations.

The fact that DB is in desolate condition, with 30 billion euros in debt due in part to the impact of the pandemic, and continues to make losses from its cargo and UK transport subsidiaries, has bolstered the FDP and Green’s position, Spiegel notes.

The Greens in particular see DB playing a key role in climate policy and aim to double its passenger numbers by 2030. The FDP, Spiegel adds, is less concerned with climate and more interested in enabling greater competition and selling off profitable assets to pay off debts and free up money for investments.

The plan could see DB’s infrastructure split off into a non-commercial public holding company, while regional, long-distance and freight transport operations would remain under one roof.

The European Commission would certainly welcome the move, and Germany’s advisory Monopolies Commission is likewise calling for DB’s breakup, the article says.

Commission chairman Jürgen Kühling told Süddeutsche Zeitung that he would like to see the next government increase competition by doing exactly what the Greens and FDP propose: “The new federal government should tackle the vertical separation of Deutsche Bahn AG, that is, separate the infrastructure from the actual rail operations.”

To the Monopoly Commission, the planned measures are understandable from the point of view of the Federal Government as a shareholder. However, they warn that this carries the risk of competitive distortions.

“It cannot be guaranteed that the financial measures will only benefit the infrastructure and not the operations of DB Group. A vertical separation of the infrastructure from the operations within the DB group would prevent this kind of distortions”, says the report.

In the current group structure without vertical separation, they recommend that the infrastructure should be supported through direct grants for new constructions, expansion, and replacement measures.

A report by an anti-trust watchdog has criticized Germany’s Deutsche Bahn national railway company for standing in the way of fair competition. It demanded its infrastructure and transport units should be separated.

According to DB , Germany’s Monopolies Commission sharply criticized policymakers for dragging their feet on the restructuring of national railway company Deutsche Bahn (DB).

The independent panel of experts advising the German government and legislature in the fields of competition and regulation said in its latest biannual report on DB that Europe’s largest railway operator continued to hamper competitors in no small way.

Deutsche Bahn is a joint-stock company, with the state being its sole shareholder. The Monopolies Commission emphasized that the only way to establish undistorted competition on long-distance and regional rail routes was to disassemble the integrated firm, meaning that its infrastructure and transport units should be separated.

Competition off-track?

The panel argues that current structures and regulations were “not suited to prevent discriminating behavior” towards smaller, private competitors having to pay fees for using DB’s rail network.

“Policymakers have to be more active in advancing competition on the railway markets,” Commission President Daniel Zimmer said in a statement.

He suggested that the transport units such as DB Schenker Logistics and DB Schenker Rail be privatized as soon as possible.

Such a move would also support the new government’s transport transition reforms, he added. The SPD, FDP and Greens are aiming to conclude their coalition talks by late November.

● With Agency reports

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