EU approves German-British rail takeover

7th November 2007, Comments 0 comments

7 November 2007, Brussels (dpa) - The European Union on Wednesday approved a plan by the state-owned German railway to buy Britain's main rail-freight operator, but only if it continues expanding into the French market.

7 November 2007

Brussels (dpa) - The European Union on Wednesday approved a plan by the state-owned German railway to buy Britain's main rail-freight operator, but only if it continues expanding into the French market.

Germany's Deutsche Bahn (DB) had asked EU clearance to buy English Welsh & Scottish Railway Holdings (EWS), the British former rail monopolist which operates rail-freight services in Britain and the Channel Tunnel, and which recently entered the French market.

The EU's executive, the Commission, ruled that the deal "would not significantly impede effective competition" in Europe - as long as DB promised to continue expanding EWS' freight business in France.

The Commission had feared that the deal would "weaken the competitive constraint exercised in France" by EWS' recent arrival, because "DB may not have the same incentives to pursue the rail freight transport business in France," a Commission statement said.

DB soothed those fears by promising to "fulfil EWS' expansion plans in France in the next five years through investments in key assets (locomotives) and personnel as set out in the EWS business plan, and to deploy these in France," the statement said.

The German operator also promised to give all companies except French national rail-service provider SNCF "fair and non-discriminatory" access to EWS driver-training schools "as an additional guarantee of maintaining competition in this market."

The EU is keen to strengthen the role of environmentally-friendly rail freight in Europe in an attempt to ease the burden on the continent's overloaded roads. Part of that plan involves attempts to open up national rail-freight markets to commercial competition.

However, former rail-freight monopoly holders in some countries, notably France, have fought to keep their privileges in place, leading to a very uneven development of competition across Europe.

DB is owned by the German state, but the government intends to sell off a minority stake to private investors. The British rail network was privatized in the 1980s in what remains a controversial and much-criticised move.

DPA

Subject: German news

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