Freight railways threaten with lawsuit against rail billions from the federal government

The federal government wants to help Deutsche Bahn in the Corona crisis with a cash injection in the billions. The competition sees this as an “unheard of distortion of competition” and turns to the EU.

A freight train passes Dabendorf station on its way north.

Wect of the billions in aid planned by the federal government for Deutsche Bahn, the rail competition in freight transport threatens with a lawsuit before the court of the European Union. The European Railways Network (NEE) announced that it would “not sit idly by and watch this outrageous distortion of competition through the exclusive support of the DB companies”. In a letter published on Sunday, the merger called on the EU Commission to impose at least conditions on the federal government in return for the planned equity injection.

The federally owned railway is to receive additional billions, because its passenger number had collapsed as a result of the Corona crisis since mid-March. Five billion euros should flow as Corona aid into the equity of the state company.

“The planned increase in equity would mean a serious distortion of competition for the rail freight companies represented by our association that do not belong to the DB Group,” said the NEE letter to EU competition commissioner Margrethe Vestager and EU transport commissioner, dated August 18 Adina Valean. Because of the contracts within the DB group, the cash injection from the federal government would also be used to cover deficits in the group’s own freight railways such as DB Cargo, argue the competitors.

The Federal Audit Office had also expressed concerns about the planned billions in aid for the railway. The federal government must ensure that undesirable business developments of the past few years are not continued, demanded the control authority in a report to the budget committee of the Bundestag. Sustainable sources of loss, for example in freight transport, would have to be eliminated, investments would only serve the railways in Germany, and subsidiaries abroad would have to be sold.