(New Zealand’s Business Day published the following report on its website on July 21.)
BERLIN — The German government has begun the process of privatising the state rail service Deutsche Bahn, its last big corporate asset, according to press reports.
Berlin had invited investment banks to compete for an advisory role in a float expected to involve about 20 percent of the railway.
The name of the bank chosen will probably be made public in the autumn, with the flotation possibly to take place in 2005, it said.
The news comes after Chancellor Gerhard Schroeder recently confirmed he will need to borrow an extra five billion euros and rely on privatisation revenues and subsidy cuts to pay for new tax breaks due next year.
Deutsche Bahn is currently facing a difficult period. It remained in loss for the second year in a row last year with a net loss of 468 million euros (548 million dollars).
It also came under heavy criticism recently for its complex new ticket pricing system, which was blamed for the group’s disappointing passenger numbers and which cost two top managers their jobs.