Tech & Biz

Germany privatizes state railway

by jessica.lam | May 30, 2008 at 09:07 am

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The debate over the privatization of Germany's railway has been highly controversial. The need for fresh capital and efficiency improvements balances the fear of the deterioration in service in less economic sectors. It seems that this question has now been answered.

A quarter of Germany's state rail firm is to be privatised after the country's politicians gave the go-ahead.

The long-disputed plan will see a 25% stake in Deutsche Bahn's passenger and freight services arm sold to investors, raising between 5bn and 8bn euros.

But the country's tracks and stations will remain in public hands.

Some politicians hope to sell off 49% of Deutsche Bahn but this is opposed by other Bundestag members while unions oppose any form of privatisation.

A public offering has been expected for a number of years, but disputes between Germany's governing coalition parties have led to long delays.

The proposed sale of one of Germany's last state-owned assets has been a controversial one, with claims that the privatisation could lead to thousands of job cuts.