EC OPENS INVESTIGATION INTO GERMAN SUPPORT FOR DB CARGO
On 31 January, the European Commission opened an in-depth investigation to assess whether certain German support measures in favour of DB Cargo are in line with EU State aid rules. DB Cargo is a 100% subsidiary of the State-owned, vertically-integrated German rail operator Deutsche Bahn AG (‘DB AG').
DB Cargo has been persistently loss-making. Its losses have been fully and continuously covered by DB AG on the basis of an open-ended profit and loss transfer agreement concluded between DB AG and DB Cargo. The Commission received a complaint alleging that the profit and loss transfer agreement, as well as certain other measures benefitting DB Cargo, amount to incompatible State aid in favour of the company. In this respect, according to the complainant, such measures give DB Cargo an undue selective advantage over its competitors, by enabling it to invest in the growth and expansion of its business and in the upgrade of its fleet, despite being loss making and without having to take profitability nor liquidity into account.
Based on its preliminary assessment, the Commission has concerns that certain measures in favour of DB Cargo may not be line with EU State aid rules and has decided to open an in-depth investigation. The Commission will now investigate further to determine whether its initial concerns are confirmed. The opening of an in-depth investigation gives Germany, the complainant and other interested third parties an opportunity to submit comments. It does not prejudge the outcome of the investigation.
Source: European Commission