COMPANYWATCH

RMT helpline 0800 3763706 :: may 2010 :: RMTnews 8 Deutsche Bahn's buyout of the bus and train operator Arriva will be one of many takeovers as European transport giants consolidate in the face of the European Union's transport privatisation drive, according to DB chief executive Rüdiger Grube. The German state-owned rail operator has confirmed its cash offer for Arriva, which values the latter's shares at £1.58 billion. "Liberalisation is starting now and the consolidation process will follow. "We have the chance to participate in entering this market in Europe - or we can sit back and continue to shrink," Grube said. DB will also operate regional transport lines in the north of Sweden from August in cooperation with the Swedish public state railway SJ, which will lose its monopoly next year. DB has slashed its workforce by half since moves to privatise it began in 1994. It is also aggressively raising capital for acquisitions and making full use of the EU's 'liberalisation' of European rail networks enforced through various EU directives and rail packages. DB already runs Chiltern Railways and the newly privatised Tyne and Wear Metro and has closed freight depots at Trafford Park and Falkland since it acquired UK rail freight firm EWS to become DB Schenker. RMT general secretary Bob Crow said that the latest takeover was a huge step in the wrong direction for rail workers and passengers. "This should sound a warning that we are heading towards a dangerous monopoly of rail and bus services across Europe in which profit comes ahead of safety and service. "Our first concern is to protect the jobs and conditions of our members and we will be seeking urgent meetings with DB and Arriva subsidiaries. "The accelerating pace of acquisitions across Europe will be bad news all round as DB seeks to squeeze both its passengers and its workforce," he said. Arriva, the UK's third-largest bus group and operator of the Arriva Trains Wales and Cross Country rail franchises, is alone among the big five UK bus and rail companies to enter Europe's increasingly neo-liberal public transport markets seriously. It operates in 11 European countries, including Sweden, Denmark, Italy and Portugal and has been successfully winning contracts to run bus and rail services for local authorities including in Germany. Deutsche Bahn already has a strong foothold in the UK but it has been losing regional passenger business in its domestic market to rival operators that have picked up contracts to run subsidised services. The latest takeover has effectively ended a bidding war for Arriva between DB and SNCF, France's state train operator. SNCF announced takeover talks with Arriva in January but called them off in March, shortly before DB began talks. But SNCF could still come in with a counterbid before the court hearing scheduled to approve the transaction, likely to take place in June. Mr Grube has already said that DB had accepted that it would have to sell Arriva's German rail business to satisfy anti- competition concerns. The business - which accounted for £330 million of Arriva's £3.27 billion 2009 turnover - is Germany's second-biggest passenger train operator after DB. "We decided that, from our point of view, this would not be a deal breaker," Mr Grube said. SNCF is still looking to gain a foothold in the UK market by buying up rail firm GB Railfreight which is being put up for sale by its parent company, First Group. A report in The Financial Times suggests that SNCF, Eurotunnel and the UK's second largest rail freight firm, Freightliner, have all emerged as potential buyers. The FT report said that First Group was considering selling GBRf, which it had taken over as part of its acquisition of GB Railways in 2003, to reduce its debt since it took over Laidlaw International, the US owner of the Greyhound bus brand. Meanwhile DB Schenker is expanding its rail freight services in Europe by adding scheduled services and new facilities. Its focal point for shipments between eastern and western Europe is a new hub in Salzburg, Austria, with private sidings providing a rail link. A new terminal in Sofia, Bulgaria, has also begun operations and in Romania, DB Schenker Romtrans has set up a network operating through a central hub in Brasov. Companywatch FRANCE AND GERMANY SLOG IT OUT Deutsche Bahn's takeover of Arriva is the latest battle in war between the German state-owned rail operator and its French counterpart SNCF