Deutsche Bahn €3 billion short on cash

The Deutsche Bahn increased its debts in 2019 and the German rail company is now €3 billion ($3.3 billion) short of meeting its financial obligations, according to a report by the Federal Court of Auditors.

The company overshot its debt threshold for 2019 by June 30th this year and currently holds €1.5 billion more in outstanding financial obligations than the Federal Republic of Germany allows. Deutsche Bahn is a private, joint-stock company with the German state as its only shareholder.

If Deutsche Bahn fails to fill in these budgetary gaps, it will "not be able to finance itself on its own,"  the report said. The authors expect liquidity to remain a problem for the company through to 2023.

The report, which was provided to lawmakers on Thursday and seen by a number of German media outlets, pointed to "extra investments, including long-distance trains and Stuttgart 21,” referring to the controversial restructuring of rail lines in Stuttgart, and organizational inefficiencies as reasons for the high costs. The Court of Auditors recommended the company sell Arriva, its foreign train line, as well as DB Schenker, its logistics branch, to help finance its projects.

Management vs government blame game

Deutsche Bahn said in a statement released Thursday that it had not seen the auditors' report and that there is a "clear plan for the billions invested in trains, infrastructure and employees.”

German Transport Minister Andreas Scheuer said he expects "clear answers" from the rail company regarding its future plans and that he's told the Bahn it needs to restructure and streamline. "The structure has to serve the hundred thousand employees and millions of clients," he said in an interview with the daily Bild.

Read more: Why Germans love to complain about trains

Sven-Christian Kindler, a Green member of parliament, called out Scheuer and his predecessors, saying that they have ignored problems at the German rail company. "For years now, political leadership from the German government has been lacking,” he said.

Deutsche Bahn's board of supervisors will meet on September 18 to discuss the company's growth strategy. A plan to sell Arriva is already in the works.

kp/sms (AFP/DPA)

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