Eurostar denies stake sale rumours amidst competition row

15 Dec 2008

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The UK division of the French-British-Belgian rail group Eurostar has dismissed media reports that it could be sold to German firm Deutsche Bahn (DB) as mere ''speculation''.

Eurostar is majority owned by France, which holds 62 per cent in the cross-Channel rail operator, with the remaining split between Britain (33 per cent) and Belgium (5 per cent).

Reports, meanwhile, said Italy's Ferrovie dello Stato and Germany's Deutsche Bahn have moved the European Commission against ''unfair competition'' from state-owned Eurostar and fully liberalise national passenger transport markets.

A Financial Times report said the Italian-German initiative was aimed primarily at France's SNCF, which was accused of unfair competition and obstruction.

The report also cited raids by French competition authorities last month against SNCF.

SNCF, however, is reported to have rejected accusations by DB and Ferrovie, pointing out that the private competitors have taken 8 per cent of the rail freight market since the start of deregulation in 2005.

The German and Italian rail firms have written a joint letter to European transport commissioner Antonio Tajani demanding the opening up of the national passenger markets so that train companies of one country could freely operate in another.

The letter said while Italy, Germany, Denmark and the UK had liberalised their markets, others had not, which goes against both free competition and reciprocity.

The Europen Union has proposed to liberalise international passenger traffic from 1 January 2010, while it has already liberalised rail freight traffic in 2003 and opened up rail freight markets since 2006.

Italy is extending its high-speed network with the opening of the Milan-Bologna link and a Milan-Rome link next year.

France's SNCF has taken a 20 per cent stake in an Italian venture, NTV, which plans to launch Europe's first privately operated high-speed train service in 2011.

The acquisition of UK's Eurostaar stake by DB could help connect London directly with several new continental destinations, including Cologne, Frankfurt and Amsterdam.

Deutsche Bahn (DB), Germany's state-owned railway, may also use Eurostar trains to operate a rival service through the Channel Tunnelto Paris and Brussels, but the government would lose the ability to influence the development of the rail link to the continent.

DB already operates high-speed services between Germany and 80 other European cities in cooperation with state-owned railways in France, Belgium, Denmark, the Netherlands, Switzerland and Austria.

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