Dhe lavish international business of Deutsche Bahn is becoming a risk for the German national budget. This is the result of a new report by the Federal Court of Auditors. “Deutsche Bahn has increasingly lost sight of its core railway business in Germany,” says the report, which is available to the FAZ. Instead of making a “stabilizing contribution” to the finances, these activities had the complete opposite effect: the risks of this foreign activity could have an adverse effect on the federal government, which as the sole shareholder is indirectly involved in the foreign business.
A look at the integrated group report confirms this. The so-called list of shareholdings of DB AG there comprises seven and a half closely printed pages. Overall, DB AG operates with more than 400 subsidiaries around the world: in Australia as well as in Venezuela, Kazakhstan and China. Since the rail reform in 1994, the state-owned company has pushed ahead with its expansion abroad. It now makes around half of its sales outside of Germany – without any recognizable added value for the main task of the group, because this does not help rail passengers in Germany. These extensive foreign activities are likely to be less and less communicable to the public in this country, after all, the ongoing climate debate also requires that Deutsche Bahn focus more clearly on its core business in Germany. This is also stipulated in the Basic Law.
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The Federal Audit Office therefore comes to an unequivocal conclusion: this group activity is not in the federal interest. The federal government must therefore work to ensure that Deutsche Bahn “reduces” its commitments abroad. With this requirement, the independent auditors are showing a certain inertia. The Federal Court of Auditors had already made this recommendation in 2019. So far, however, not much has happened in this area.
Long discussions about sale
The report, which is currently before the budget committee of the Bundestag, is likely to further fuel the discussion about share sales. Recently, they have been listed particularly with a view to the international logistics group Schenker, the group’s largest foreign investment, or the British bus and train operator Arriva. The FDP and the Greens recently spoke out in favor of selling Schenker quickly. Here, too, the prevailing view is that Deutsche Bahn should concentrate on its core business.
The parliamentary manager of the FDP parliamentary group Torsten Herbst referred last week to the high debts of the group and the investment backlog in the German rail network. “Therefore, investments in companies that, like DB Schenker, generate most of their sales abroad should be sold,” he said. The household expert of the Greens Sven-Christian Kindler became even more fundamental last autumn in an interview with the FAZ “Neither the railways themselves nor the federal government have control over this uncontrolled growth,” he complained. After a decade without restrictive control of foreign business, Deutsche Bahn now has hundreds of holdings in companies all over the world and numerous foreign subsidiaries.
With regard to Schenker, for example, the report says: The company benefited from high demand and sharply increased freight prices during the Corona crisis. However, growth opportunities are severely limited. In the longer term there is a risk of losing competitiveness if significant investments are not made. However, this would further weaken the earning power of DB AG. The balance sheet of the British bus and train operator DB Arriva, which operates throughout Europe, is even worse. He is also one of the largest foreign holdings. Deutsche Bahn bought it in 2010. At that time, good business was promised, but the loss-making subsidiary is now weighing heavily on the railway balance sheet. From today’s perspective, the Federal Court of Auditors therefore considers the acquisition to be an “enormous loss-making business”, and there are also “considerable information deficits”. Arriva has been on the sales list for some time – but so far without success. Meanwhile, efforts to contain the network of companies beyond the borders are sluggish.