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Nov 29 2024

EU approves 1.9 bln euro state aid for DB Cargo

BRUSSELS  - The European Commission has approved 1.9 billion euros ($2.01 billion) in state aid for German rail freight operator DB Cargo, a subsidiary of Deutsche Bahn (DBN.UL), the European Union said on Friday.

The aid is contingent on the implementation of a restructuring plan aimed at ensuring the company’s long-term viability, the EU said in a statement.
The decision follows an in-depth investigation launched in January 2022 after a competitor raised concerns about potential market distortions.

 

WHY IT'S IMPORTANT

The approval of this aid could ensure the long-term viability of DB Cargo, crucial for sustainable logistics circuits as a lower-emissions alternative to road transport.

CONTEXT

DB Cargo has been under scrutiny since a competitor's complaint sparked an in-depth investigation in 2022. The probe focused on a profit and loss transfer agreement between Deutsche Bahn AG and DB Cargo, intra-group services, group financing conditions of loans, and the partial coverage by the German Federal Railway Fund of remuneration for civil servants. Read more

 

Source: REUTERS