Latest Rail News

14.01.19

Deutsche Bahn may sell Arriva to plug multi-billion gap in finances

Deutsche Bahn (DB) reportedly wants to sell Arriva in order to plug a £3.6bn gap in its finances, although reports from Berlin say Brexit is making it hard to value the rail business.

The German rail operator is holding crisis talks with the transport minister Andreas Scheuer tomorrow to discuss its dire finances and performance, according to a source close to the plans who spoke to Reuters.

Deutsche Bahn has come under fire for a decline in performance in domestic passenger rail and needs to plug a funding gap estimated to be at least €4bn.

With the source saying that the state-owned company is considering selling Arriva, opinions are reportedly split among politicians and the DB’s board and a decision is not expected to be made on Tuesday.

Deutsche Bahn has operated as Arriva’s international subsidiary since it bought the transport company in 2010, acquiring three National Rail franchises – Arriva Trains Wales, CrossCountry and Chiltern Railways – as well as Tyne & Wear Metro, Wrexham, and Shropshire and a chain of bus companies.

DB currently has had rail and bus operations in the UK since the purchase, and it has operations in thirteen other countries, but Arriva’s headquarters are based in Sunderland.

The Handelsblatt newspaper, which first reported the plan, claimed that the complete sale of Arriva could raise between €4bn and €4.5bn.

But Reuters’ sources said that there had been problems valuing Arriva due to the UK’s looming departure from the European Union.

Last week Deutsche Bahn was in the news demanding Network Rail pay compensation for the extensive delays in electrifying routes for its Northern Rail franchise which has come under fire for recent poor performances.

In November, DB entered crisis talks with the UK government over the massive levels of disruption which have reportedly crippled the franchise’s finances.

 

Image credit -  Phil Noble/PA Archive/PA Images

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