Germany
Railway privatisation in progress ·On 24Jul transport minister Wolfgang Tiefensee presented a government draft law, which should pave the way for a partial sale of the German railway (“Deutsche Bahn AG”) by the end of 2008. ·The draft law, while implying a part-privatisation railway services, de-facto leaves control the rail infrastructure in the hands of the Deutsche Bahn AG (DB) for 18 years. ·Critics from CDU/CSU and from Laender governments aim to limit the controlling power of the DB in order to secure access for private rail transport providers. ·In terms of budget relief, the impact of railway privatisation may be mixed. A 10% to 15% contribution to network maintenance costs from privatisation proceeds over an 18 year period may be the most that can be expected.
Asset conclusions: privatisation would send a positive signal in terms of transport liberalisation and competition. Effect on specific (transport) stocks depends on the conditions in terms of public subsidies for the railway.
© Graham Bishop
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