German train company faces €767m deficit

News that Germany's troubled train company Deutsche Bahn will lose up to 1

News that Germany's troubled train company Deutsche Bahn will lose up to 1.5 billion deutschmarks (€767 million) over the next three years has prompted its chief executive to call for part of the company to be sold to a foreign operator.

"A partial sale of 25 per cent to begin with would make sense; it would bring in money needed to put many things in order," said chief executive Mr Harmut Mehdorn yesterday.

But the federal government has rejected any such sale of the state-owned company, though transport minister Mr Reinhard Klimmt has called the projected deficit a "catastrophe" and has put on indefinite hold plans to float the company.

Until recently the firm had spoken of projected profits exceeding DM10 billion between now and 2004, the planned date of the stock market flotation.

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It is not the first time Deutsche Bahn has corrected its profits downwards and Mr Klimmt's patience with company management has run out.

"It has to be the last time, really the last time. [Deutsche Bahn] chief Mr Mehdorn and his people know that. No one in Deutsche Bahn will be allowed to play with hidden cards any more," said Mr Klimmt in an interview with news magazine Der Spiegel.

Traffic on Germany's roads will rise by 60 per cent in the next 15 years and Mr Klimmt has been given the near-impossible task of encouraging Germans to take the train.

A project to rebuild Germany's crumbling rail network began in 1994 and Mr Klimmt used the recent truckers' strikes to announce an extra DM6 billion cash infusion using proceeds of the recent third generation mobile phone licence auction.

But faced with German zeal for driving on speed-limitless motorways and petrol prices comparatively low by European standards, he has had a thankless job.

Deutsche Bahn has long been a national joke, coming out bottom for the second year running in a recent satisfaction survey of 51 industrial sectors. It is hardly surprising, with train carriages for medium-haul trips being an average of 20 years old and no shortage of customer tales of train delays.

The company was also hurt by the Expo in Hanover, laying on extra high-speed trains to bring to Hanover the millions of visitors that never materialised. Deutsche Bahn ran empty trains for weeks before curtailing services.

Derek Scally

Derek Scally

Derek Scally is an Irish Times journalist based in Berlin