International Railway Journal - August 2007 - (Page 4)

News German cabinet backs DB sale plan T HE cabinet of German Chancellor Mrs Angela Merkel has approved draft legislation to partially privatise German Rail (DB). The legislation proposes the sale of at least a quarter of DB’s shares by the beginning of 2009, although the government is constitutionally bound to retain a minimum shareholding of 51%. The government estimates the sale of 25% of DB will raise €3 billion. However, a decision has yet to be made on whether these shares will be offered to large strategic investors or sold through a stock market flotation. DB will continue to manage infrastructure and stations for 15 years before these assets are returned to the government. The proposals approved by the cabinet suggest DB will still need around €2.5 billion per year from the government for infrastructure maintenance. Unveiling the proposals, Transport Minister Mr Wolfgang Tiefensee said: “No investor will be able to dictate how the track is used.” He added that the rights of private investors will be restricted and that with a shareholding of 75%, the government will remain a strong influence in DB’s future development. According to Tiefensee, DB could go to the capital markets by the end of 2008 - good news for the privatisation’s leading proponent, DB CEO Mr Hartmut Mehdorn, who has lobbied persistently for an early flotation. “We have consistently prepared ourselves for the capital markets and we’re ready,” he said. However, the proposed sale must still clear a number of hurdles. Before the bill becomes law it must first be ratified by both the lower and upper chambers of the German parliament, and it requires an amendment to the German constitution, which will probably be made before the end of the year. The bill also requires the approval of Germany’s 16 federal states, at least two of which are opposed to the law. DB says it expects increasing freight and passenger traffic to bolster its financial performance this year, predicting a pre-tax profit of €2.5 billion, up from €2.1 billion in 2006. DB has debts of around €19 billion. Construction starts on new Vienna central station C ONSTRUCTION of Vienna’s new central station began in June. The 10-platform station is being built on the site of the existing South station, with a tunnel connecting the new station to the Vienna West - Linz line. Construction work is initially focussing on the connection of the S-Bahn and metro stations at Südtirolerplatz and the demolition of Vienna South station. The €886 million project will be completed in 2012, when all intercity services serving Vienna will be diverted away from West station. It will be served by around 1000 trains and used by 145,000 passengers per day. RDC closes Guatemalan Railways R AILROAD Development Corporation (RDC) is to close its Guatemalan Railways (FVG) concession on October 1 because of what it calls “grave violations and abuses” committed by the national government. RDC has been in dispute with the government for more than a year, after the government declared RDC’s operating contract was “against the interests of the state.” In a letter to customers and staff of FVG, RDC chairman, Mr Henry Posner III, claimed the problems meant FVG was unable to obtain credit, and had suffered increased incidences of squatting, judicial interference and police indifference. FVG has found it difficult to maintain traffic and obtain funds for investment: Posner says RDC will continue with legal action against the Guatemalan government. European operators launch high-speed alliance S EVEN European highspeed train operators launched a new alliance called Railteam to offer what they call seamless long-distance travel between the countries they serve, and to compete more effectively with short- haul airlines. Austrian Federal Railways (ÖBB), Belgian National Railways (SNCB), Eurostar UK, French National Railways (SNCF), German Rail (DB), NS Hispeed, and Swiss Federal Railways (SBB) say they will offer improved connections between each others’ services and a single point of contact for ticket purchases. The Railteam brand will be rolled out across all seven operators’ high-speed services, with improved and easier booking to destinations across the network. It will mean passengers will be able to buy tickets to any point on the network from anywhere in Europe through Railteam, thanks to a €30 million investment in booking systems. Railteam expects 25 million passengers a year to travel on high-speed trains in Europe by 2010, with significant increases in business and leisure travel expected. RZD restructures freight business R USSIAN Railways (RZD) is to transform part of its freight operations into a jointstock company in a bid to eliminate cross-subsidisation of passenger services. To be known as First Freight Company (FFC), RZD will hold all but one share of the operation, which will be valued at a minimum of $US 5 billion. FFC will operate rolling stock, while RZD retains its status as shipper. FFC will receive around 200,000 freight wagons, as well as 75,000 general-purpose box wagons. The plan is for FFC to take on wagons in sectors where there is competition and it hopes to generate higher yields than at present. IRJ August 2007

Table of Contents Feed for the Digital Edition of International Railway Journal - August 2007

Contents This month News Market News Transit News News Analysis Voith Goes For Maxima Impact First Gauge-Changeable Loco Under Test Power Surge China Feels the Need For Speed A Firm Foundation For Chinese High-Speed Testing Times on the Betuwe Route Tough Tests For Mass Transit Software A Measure of Success Rendezvous Full Contact List Advertisers Index The Last Word

International Railway Journal - August 2007

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