German cabinet backs part-privatization of national railway

Jul 24, 2007, 9:23 GMT

Berlin - Germany's broad coalition government backed a proposal to part-privatize the country's state-owned railway at a cabinet meeting in Berlin Tuesday.

The draft bill discussed at the cabinet meeting has still to be passed by both houses of parliament, where it is expected to meet opposition in the upper house.

Opponents also have the option of challenging the scheme, which would see around 25 per cent of the state-owned Deutsche Bahn (DB) sold, through the courts.

The cabinet unanimously backed a proposal put forward by Transport Minister Wolfgang Tiefensee.

If passed by parliament, the basic infrastructure, including the rail network, the stations and energy generation, would remain in the possession of the German state, while DB would be able to operate the system with private sector partners for 15 years.

Tiefensee had previously announced plans to dispose of 25 per cent of the railway by 2008, although this figure was not included in the proposal put to the cabinet.

Privatization of DB has been under discussion for more than 10 years.

While the bill is thought likely to be passed by the lower house, the Bundestag, where Chancellor Angela Merkel's coalition has a large majority, several states have indicated they will oppose it in the upper house, or Bundesrat.