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  The World From Berlin: Is Germany Flogging Its Proud Railway Too Cheap?

The World From Berlin Is Germany Flogging Its Proud Railway Too Cheap?

Germany's plan to sell off part of the railway network has predictably divided media commentators, with conservatives praising the venture and leftwingers saying it will hurt passenger services and railway employees.

The German government's decision on Wednesday to sell up to 49 percent of the railway network to private investors has been praised in the conservative media as an overdue move to boost efficiency in the country's last remaining state-owned company.

But critics say the government is selling the network off too cheap, that the privatization in its current form won't boost competition and that customer service will suffer as private investors insist on the shutdown of unprofitable routes.

And at a time when everyone is talking about climate change, should the government cede control of one of the most environmentally friendly forms of transport?

Conservative Die Welt writes:

"Several privatizations have proven that privately managed companies work better and are closer to their customers than state-owned ones."

"A management operating within strict budget limits will achieve higher profits than one that just opens up its hands to beg for more every time it runs out of money."

"Sure, the government's privatization plan has its flaws. It's unclear whether the government will receive an appropriate return for its billion-strong subsidies in the track. But that doesn't mean that we'll get the horrific conditions seen in Britain where rail privatization led to disaster."

Center-right Frankfurter Allgemeine Zeitung writes:

"It's not often that the Merkel government comes up with a convincing economic policy, given that its decisions are increasingly paternalistic and even hostile to competition. The cabinet decision on the partial sale of the state-owned railway makes for a pleasing contrast."

"The government has declared its clear desire for an extensive privatization. Whether it will be able to break growing resistance to the project within the coalition parties and the regional states is another matter. A look at the success stories of other privatizations should teach the skeptics that the sale of state monopolies combined with the liberalization of markets has so far always heightened a company's efficiency and improved customer service."

Mass-circulation daily Bild writes:

"The stock market flotation will bring in fresh money, the group will be able to continue its global growth. That safeguards jobs in Germany and will also benefit the passengers.

"The law now agreed on makes clear that the federal government will retain control of the railway and its track network. That makes sense and is the right thing to do."

Business daily Financial Times Deutschland writes:

"The privatization of a minority stake isn't logical…The railway will run the track network for at least 15 years after the privatization. That harbors the danger that the former monopolist will impede competition. The government should instead hand over the network to an independent operator to open it up to market forces. That would rapidly bring more passengers and freight onto the tracks."

Left-wing Die Tageszeitung called the privatization the biggest scandal of Merkel's term so far:

"First there are the ridiculously low proceeds that are expected. For €5 billion, a quarter of a company is being sold that is today worth around €180 billion. The reason given for this ludicrous business deal is that the railway needs money for investment and for expansion abroad. Of course the railway needs access to fresh capital, but not on such poor terms."

"The railway will try to boost its earnings expectations with measures that will hurt customers and employees. That means less service and fewer staff at the stations, the closure of unprofitable routes, longer working hours and lower wages for employees.

"Without deriving any discernible benefit, the government is ceding power and influence over railway and transport policy. Everyone's talking about protecting the climate -- but the government is putting the most environmentally friendly form of transport, the railway, at the mercy of investors. They won't be interested in providing transport in rural areas that otherwise depend on cars, they'll only be interested in their own profits."

-- David Crossland, 3 p.m. CET