06.05.16
DB set for part-sale of Arriva and Schenker rail arms
The Arriva and DB Schenker owner, the German-based Deutsche Bahn (DB), has pushed forward plans to sell off parts of its company in order to dodge mounting debt and allow for continued investment.
After a meeting of its Supervisory Board on Wednesday (4 May) in Berlin, decision-makers instructed the company’s management board to develop an implementation plan for third-party minority holding in Arriva and DB Schenker.
While a final decision on this is planned for autumn, DB is firm on its intention to “financially secure the largest quality and investment campaign in the company’s history”.
Professor Utz-Hellmuth Felcht, chairman of the Supervisory Board, said after the meeting: “If we don't take action, the group's debt will increase substantially by 2020.
“A third-party equity interest limits the level of debt and creates the financial scope necessary to continue the quality and investment campaign in Germany.”
The company’s board chairman, Dr Rüdiger Grube, added that DB’s “express intention” with this move is for Arriva, based in Sunderland, and for DB Schenker, the biggest freight operator in the UK, to “continue to be fully consolidated in DB’s balance sheet”.
But UK unions hit out at the foreign company’s decision, with the RMT, which has consistently argued against German ownership of national franchises, warning that a “fire-sale of a sizeable chunk of DB’s UK operations jacks up a new threat to jobs and services”.
It argued that the proposed sell-off of up to a 45% minority stake in Arriva and DB Schenker will cause British DB employers to “rapidly” see the company’s ownership status transformed in the next three years.
Its general secretary, Mick Cash, also took the opportunity to criticise the privatised franchising model, given that ownership and solvency of parent companies can change without unions, rail users or even the government franchising body “having any say in it”.
Cash also recently celebrated the decision to cut short DB’s seven-year Tyne & Wear Metro contract after Metro passengers were allegedly “let down” by its operator, DB Regio.
Arriva recently won the £1.5bn contract to run London Overground services from November this year, and started running the Northern franchise on 1 April.
(Image: c. Phil Noble)