German railway service Deutsche Bahn hit hard by COVID-19 crisis
Der Spiegel
Largely due to the coronavirus crisis, German railway service Deutsche Bahn (DB) has an 11-billion-euro hole in its budget, although money-losing subsidiaries have also contributed to the situation, Gerald Traufetter . The pandemic has kept train cars largely empty, but the company has continued to operate around 75 percent of its long-distance trains at the instruction of Germany鈥檚 federal transport ministry, Traufetter adds. The situation has left DB with an expected loss of between 11 and 13 billion euros by 2024.
While Germany鈥檚 transport and finance ministries have come up with a draft rescue plan, members of Germany鈥檚 pro-business FDP party in the Bundestag are demanding a report on DB鈥檚 finances by Germany鈥檚 Supreme Audit Institution (SAI), or Bundesrechnungshof, to see exactly to what extent the company鈥檚 problems are actually due to the COVID-19 crisis. Traufetter points out that DB鈥檚 dim financial forecast also includes losses from its rail freight unit DB Cargo, as well as from its troubled subsidiary Arriva, which operates train and bus services in the UK. DB has cancelled plans to sell or publicly list Arriva, which was expected to bring the company some 600 million euros. Likewise hit by the coronavirus crisis, Arriva is expecting a 700-million-euro loss for the year. DB can still count on further government assistance, however. Earlier this year the German transport ministry (BMVI) agreed to invest a record 86 billion euros in DB by 2030 to upgrade grid infrastructure and train stations as well as gear DB's power supply further towards renewables.
