2002/643/EC: Commission Decision of 7 May 2002 relating to alleged State aid by the Federal Republic of Germany for the company BahnTrans GmbH (Text with EEA relevance) (notified under document number C(2002) 1599)
Date: 2002-05-07
Institutions: European Commission
Subjects: Germany, State aid, carriage of goods, competition law, control of State aid, trade relations, transport company

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Official Journal of the European Communities

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II

(Acts whose publication is not obligatory)

COMMISSION

COMMISSION DECISION

of 7 May 2002

relating to alleged State aid by the Federal Republic of Germany for the company BahnTrans
GmbH

(notified under document number C(2002) 1599)

(Only the German text is authentic)

(Text with EEA relevance)

(2002/643/EC)

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

Having regard to the Treaty establishing the European
Community, and in particular the first subparagraph of Article
88(2) thereof,

Having regard to the Agreement on the European Economic
Area, and in particular Article 62(1)(a) thereof,

Having called on interested parties to submit their comments
pursuant to the provisions cited above (1),

Whereas:

I. PROCEDURE

(1)

By letter dated 10 January 1996, the Association for the
Promotion of Competition and Honest Behaviour in the
Freight Forwarding Business (Verein zur Förderung des
Wettbewerbs und lauteren Verhaltens im Speditionsge-
werbe eV, hereafter Wettbewerbsverein or the complai-
nant) requested the Commission to inquire with the
German Federal Government about
the payment of
allegedly illegal State aid for the company BahnTrans
GmbH (hereafter BahnTrans) (2).

(1) OJ C 52, 17.2.2001, p. 2.
(2) The complainant sent further letters to the Commission, dated 31
July 1996, 7 November 1996, 8 January 1997, 24 March 1997,
4 August 1997, 28 October 1997, 4 November 1997, 22
January 1998, 25 March 1998, 13 May 1998, 25 June 1998, 11
December 1998, 15 December 1998, 16 April 1999, 14
September 1999, 27 October 1999 and 17 May 2000. The
Commission in turn replied to the complainant by letters dated
27 September 1996, 4 August 1997, 13 October 1997, 2
December 1997, 12 October 1998, 20 December 1999 and 23
May 2000.

(2)

(3)

(4)

(5)

Based on the information it received from the complai-
nant, the Commission inquired with the German Federal
Government. An exchange of Letters ensued (3).

By letter dated 27 November 2000, the Commission
informed the Federal Republic of Germany that it had
decided to initiate the procedure laid down in Article
88(2) of the EC Treaty in respect of the measure.

The Commission decision to initiate the procedure was
published in the Official Journal of the European Communi-
ties (4). The Commission invited interested parties to
submit their comments on the measure. Within the time
frame indicated in the notice, the Commission did not
receive any comments from interested parties. However,
the Commission received, with letter of 15 June 2001,
comments from ABX Logistics (Deutschland) GmbH, the
legal successor of BahnTrans GmbH.

II. FACTS

Creation of BahnTrans — contribution of
companies

the mother

On 2 September 1994, the Deutsche Bahn AG (DB AG)
and Thyssen Haniel Logistik GmbH (THL)
founded
BahnTrans, as a joint venture to develop the transport of
small consolidated cargo loads in a largely rail-based
network. DB AG is fully owned by the German State,
whereas THL is a company of the Thyssen Handelsunion
(THU) conglomerate.

(3) Commission letters dated 20 June 1996, 28 May 1997, 1
September 1997 and 28 May 1998. Germany replied with letters
dated 1 July 1997, 12 September 1997, 30 September 1997 and
17 July 1998.
(4) See footnote 1.

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(6)

(7)

(8)

According to Subsection 5 of the Statutes of BahnTrans,
in their certified version of 30 November 1995, THL
gave the following original capital contribution (Stamm-
einlage): DEM 45 million in cash deposit (Bareinlage),
DEM 19 975 million as contribution in kind (Sachein-
lage). DB AG gave the following capital contribution:
DEM 64 975 million in cash deposit.

largely trucks and
The contributions in kind by THL,
other transport means, were sold by agreement of 15
March 1995 between BahnTrans and THL Rheinkraft
GmbH to the latter company, and BahnTrans could thus
rely on the cash generated by the sale of the equipment.
the capital contribution of THL had
The value of
been assessed and approved as fair and reasonable
by the independent accountants with report of 1
October 1994 (5).

Strategy of BahnTrans

The former Deutsche Bundesbahn had recognised that
its concepts for the stabilisation of its market share in
the ‘small cargo’ segment — general cargo, part-load
transport, express and courier services — had not
worked well. After the railway reform of 1993, DB AG
began to look for a partner to develop this segment. DB
AG as such would close down totally its own ‘small
cargo’ activities. It would perform rail and, to a lesser
degree,
road transport and production activities as
subcontractor of a freight forwarder and freight consoli-
dator. The strategic goals of this venture were transport
of more volume, more revenues and stabilisation of the
position of the DB AG in this sector. At the time of the
creation of BahnTrans, the parties envisaged a market
growth of about 7 % per year. Price increases of about
5 % per year were thought to be realistic.

(9) With this vision, BahnTrans was formed in cooperation
with THL. BahnTrans sole function was that of a freight
forwarder and freight consolidator for general cargo
consignments in the segment of up to 2 000 kg. The
parties believed that, in order to be able to consolidate
and ship such cargo throughout Germany, about 40
In such freight centres,
freight centres were needed.
cargo for regional distribution or from regional sources
is consolidated into full loads and then dispatched, via
regular liner services on long distance transport,
to
another freight centre for distribution. It was the func-
services
tion of BahnTrans
between the freight centres. In this context, it is impor-
tant to note that the customers in the general cargo
business expect, as a rule, door-to-door shipment times
of 24 hours nationally, and 48 hours for international
transports to neighbouring countries.

to organise these liner

(5) KPMG, Prüfungsbericht, Wertgrundlagen des Teilbetriebs Stückgut
der Thyssen Haniel Logistic GmbH Engelhardt, Düsseldorf, für die
Sacheinlage in die BahnTrans GmbH, Duisburg, zum 1. Oktober
1994.

(10)

(11)

In the BahnTrans concept, DB AG would provide, to as
large a degree as possible, the long distance regular liner
services by rail. It would also be responsible, via subcon-
tractors, for the final delivery or pick-up via trucks from
the freight centres to the final destination. By connecting
the freight centres of BahnTrans, and by relying on
existing or future combined transport terminals near the
freight centres, DB AG could thus focus on its core rail
business and at the same time close its own freight
dispatch centres, which were heavily loss-making.

This concept could thus be successful under two condi-
tions:
(1) a sufficient number of freight centres with
combined transport terminals, and (2) a reliable liner
service by DB AG. The main business relationships
between BahnTrans and DB AG were thus twofold. First,
DB AG acted as transport operator for BahnTrans.
Second, DB AG leased several freight centres to Bahn-
Trans.

(12) However, the 1994 forecast for the development of the
small cargo segment did not prove to be correct. Due to
the increasing liberalisation of the market, competition
became very keen in the forwarding market, and market
prices decreased. The abovementioned business goals of
BahnTrans were not reached. According to the informa-
tion of
reported the
following figures for the time period July 1994 to
June 1998:

the Commission, BahnTrans

Year

Turnover

Results

1994/1995

[...] (*) DEM

[...] DEM

1995/1996

[...] DEM

[...] DEM

1996/1997

[...] DEM

[...] DEM

1997/1998

[...] DEM

[...] DEM

(*) Business secret.

(13) On 23 June 1998, DB AG sold its participation in
Bahntrans to SNCB for consideration of 10 % of the
shares of THL. THU sold 100 % of the shares of THL
to SNCB.

The freight facilities

(14) Due to the difficult market conditions, the ambitious
plan to connect 40 freight centres via rail transport had
to be scaled down. DB AG built only four freight centres
for the use of BahnTrans: Regensburg, Cologne, Karls-
ruhe and Bremen. The freight centres Hamburg, Hagen
and Nürnberg were financed by the private investor THL
and leased to BahnTrans. As DB AG wanted to close
down its own freight collection and despatch activities
as quickly as possible, and not later than 1998, it leased

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out further 16 of its own freight collection centres to
BahnTrans. These ‘freight collection centres’ consist of
older cargo despatch halls, in which cargo is transferred
from trucks to conventional rail wagons. These freight
collection centres were not as efficient as the foreseen
new freight centres with combined transport terminals.
As of 1997,
it became clear that the concept of 40
freight centres with combined transport terminal would
not be realised at all. In order to still be present in large
part of the markets, BahnTrans rented these older freight
collection centres as of 1997 as a second best option.

(19)

(20)

The freight centre Karlsruhe was terminated in June
1998, and used by BahnTrans as of 22 June 1998 under
a formal rental agreement.

The 16 freight collection centres were used by Bahn-
Trans since 1997 under formal rental agreements. DB
AG had first tabled an offer amounting to DEM […]. In
a letter of 13 March 1997, BahnTrans countered this
offer by presenting a detailed market rental analysis,
which, according to it, would only warrant a total rental
fee of DEM […]. Finally,
the parties agreed on the
market rate + […] % as a rental fee, namely DEM […]
per year for the 16 freight collection centres.

(15)

commercial

The
between DB AG
relationship
concerning the four freight centres and the 16 freight
collection centres is as follows:

(16) DB AG sold the freight centre Cologne to the leasing
firm Deutsche Anlagen Leasing. This company is owned
by the Westdeutsche Landesbank, Landesbank Rhein-
land-Pfalz, Bayerische Landesbank and the Landesbank
Hessen-Thüringen (6). It is fully independent from DB
AG. DAL leased the freight centre to BahnTrans. The
leasing agreement signed of 22 December 1997 features
standard leasing clauses. It provides for a leasing dura-
tion of […] years.

(17)

(18)

BahnTrans paid a rental fee of DEM […]/month for the
use of the freight centre in Regensburg.
Information
from independent real estate agents in the region indi-
cates a market rate of DEM […] for such a centre.
BahnTrans thus paid more than the market rate. For the
use of the freight centre in Bremen, the rental fee was
DEM […]/month, while market rates are indicated to be
DEM […] for such an object in the region. Finally,
BahnTrans rented the freight centre in Karlsruhe for
DEM […]/month, and the regional market rate was
DEM […].

BahnTrans used the freight centres Regensburg and
Bremen for some time, before a formal rental agreement
was concluded between DB AG and BahnTrans. For the
time of actual use without rental agreement, BahnTrans
paid DB AG a use fee based on the total price of
construction of the facilities, which had the function of a
reimbursement of capital interest for the financing of the
construction by DB AG.

Regensburg

Bremen

Use fee period

May 1996 to
October 1997

January 1996 to
June 1998

Rate agreed between
DB and BahnTrans

[...] %

[...] %

Five years mortgage
market rate

6,11 %

6,07 %

Use of railway for transports

(21) At the beginning of the joint venture, it was planned
that about 70 % of the liner transports between the
freight centres should be conducted by rail. This 70 %
figure resulted from the relation between the turnovers
of the partners in the general cargo business, which were
DEM […] for rail-based DB and DEM […] for road-
based THL (7). However,
the rail-based transport on
account of BahnTrans was in reality as follows:

1994/1995

1995/1996

1996/1997

[...] %

[...] %

[...] %

(22)

(23)

The growing gap between the expected and the real rail
share in transport was due to the fact that DB AG was
not in a position to propose rail liner services between
the freight centres, which were competitive with the
ones of road. This was due to two circumstances: first,
the envisaged combined transport
in the
vicinity of the freight centres were not built. Even where
there were combined transport terminals, the service
quality could not meet the standards demanded in the
industry in terms of reliability and speed. Therefore, in
order to be able to still offer a competitive service
vis-à-vis its competitors, the freight forwarder BahnTrans
had to rely increasingly on road.

terminals

BahnTrans maintained a similar flexibility as regards use
of transport means vis-à-vis THL. From the creation of
the joint venture until 1 June 1996, THL Rheinkraft was
indeed the sole provider
long-distance trucking
services for BahnTrans at prices agreed in advance. In
the first phase of its existence, BahnTrans had to rely on
competitive and always available trucking services to
build up its market and its reputation. Later,
it was
liner services would be
thought, a large amount of

for

(6) See Deutsche Anlagen-Leasing GmbH, Annual Reports 1990,

1999.

(7) Relationship: […]/[…].

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performed by rail. It would have been riskier for Bahn-
Trans to build up with numerous new partners a whole
network of liner services than to rely on the expertise
and network of THL Rheinkraft. Prices for these trans-
ports were based on average fix costs for trucks and
personnel per day plus average variable costs per truck-
kilometre. As of 1 June 1996, this arrangement was
changed, and BahnTrans now only had the obligation of
first request to THL Rheinkraft for transport of sealed
swap-bodies. Under this arrangement, BahnTrans had to
ask a quote from THL Rheinkraft for transport in this
market segment. However,
if BahnTrans could find a
better offer, it was free to prefer this one to the one of
THL Rheinkraft.

(24)

The obligation of
first request was not appropriate
vis-à-vis DB AG, as there was, during the time period
relevant to this case, no actual competition in rail freight
services on the German network. BahnTrans was thus
structurally not in a position to receive a better offer for
rail transport than the one from DB.

Take-over of personnel

(25)

THL brought in 2 680 employees into the joint venture,
as contribution in kind. In the framework of the sale of
trucks from BahnTrans to THL Rheinkraft of 1 May
1995, 200 employees were transferred to THL Rhein-
kraft, so that THL brought in a total of 2 480 employees
into BahnTrans.

(26) At the creation of BahnTrans, DB AG transferred 318 of
its work force to the joint venture. The parties had
envisaged that about 3 200 employees of DB AG would
be working in BahnTrans, once the planned 40 freight
centres were operational. However, as only seven freight
centres became operational, BahnTrans only took over a
total of 1 446 DB employees.

(27) All personnel costs of the former DB and former THL
employees were fully borne by BahnTrans. However, DB
AG agreed to bridge the cost difference between the
higher remuneration benefits paid to employees at DB
AG as a public enterprise, and the lower salary and
remuneration levels paid by BahnTrans operating in the
private sector. The special benefits of employees of DB
AG consist especially of the following:

— free use of rail commuter services,

— pension rights on average 75 % higher than in the

private sector, plus additional aliments,

— higher contributions of DB AG as an employer to

social security than in the private sector,

— continued salary payments in case of illness is not
restricted in time for civil servants working in DB
AG, and limited to 26 weeks for workers and
employees in this company; the private sector grants
six weeks of salary payments.

(28)

This contribution of DB AG was limited to two years.
Such a contribution was not requested for former THL
employees, as they did not enjoy the special benefits that
DB employees had.

Marketing strategy of BahnTrans

(29)

and intense price

The creation of BahnTrans in 1994 was set in a context
the road freight and
of continuing liberalisation of
forwarding market
competition.
Concentration tendencies were noted. Thus, Schenker
merged with Rhenus and bought the Weichelt company.
Danzas bought ASG and Federal Express in Germany.
Bilspedition took over Nellen & Quack, and Nedlloyd
bought Union Transport. These and other concentra-
tions, and the setting-up of new nationwide forwarding
networks in Germany, again led to further price reduc-
tions. Since 1994, there was total price freedom on the
German market
transportation. Keen
inland
competition on price was the consequence. The market
for freight forwarding activities is polypolistic, in that
there are a large number of
freight forwarders. The
service offered is by and large homogenous, so that
competition is carried out to a large extent via the price
level. One association report notes a ‘tense competition
situation’ resulting from the opening of the EC bounda-
ries as of 1 January 1993. According to the report, to
keep market share, firms are engaging in sharp price
competition (8).

for

(30)

BahnTrans had to participate
in this keen price
competition, as evidenced by its aggressive pricing
strategy reported in newspapers and in complaints from
competitors.
turnover was considerably reduced
between 1996 and 1998, from DEM […] to DEM […].

Its

commercial

Other
DB AG

relationships between BahnTrans and

(31) Apart

from the commercial

relationships developed
above, two further aspects need to be mentioned: 1. the
revenue sharing between BahnTrans and DB AG, and 2.
the cash injections made by DB AG and THL in 1997.

Revenue sharing

(32) Originally, DB AG received from BahnTrans payments
for its services amounting to about […] % of the turn-
over generated by DB AG through its railway activities
for BahnTrans. As of
the business year 1996/1997,
BahnTrans took over certain handling and administrative
activities. The payment figure was therefore reduced to
[…] % of the invoiced turnover. This figure is in accord-
ance with the average payments received by transporters
from the freight
forwarders. As a rule, a freight
forwarder, which does not operate transport services,
turnover as
must calculate about 70 % of
payment for transport services through third parties (9).

its total

(8) Fachvereinigung Spedition und Lagerei Nordrhein eV,

Jahresbe-

richt in Schlagzeilen, 1993/1994.

(9) See Bundesverband Spedition und Logistik eV, Zahlen, Daten,

Fakten (2000).

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Cash injections

not get any more stringent guarantees from BahnTrans
than DB AG concerning the use of its assets.

(33)

(34)

(35)

In July 1997, DB AG and THL agreed to each inject
DEM […] into BahnTrans for the business years 1996/
1997 and 1997/1998. This was done in conjunction
with a change in the management, and also with a
change in strategy for BahnTrans. By 1997,
it had
become clear that the original 1994 concept of rail liner
services between 40 freight centres could not be
achieved. Instead, as mentioned above, BahnTrans would
operate with seven freight centres and 16 freight collec-
tion centres. This would permit DB AG to close down
its own freight consolidation activities of ‘DB Stückgut’,
which was heavily loss-making.

In return for the DB cash injections, BahnTrans was
obliged to secure 1 574 posts for former DB employees.
If this could not be secured, DB AG was entitled to a
repayment of its cash injection. This repayment was
limited to the possible difference between the injections
of DB and THL into the company in the business years
1996/1997 and 1997/1998. Furthermore, THL accepted
to fully take over or close the ‘DB Stückgut’ distribution
system before the date contractually agreed before, i.e.
30 September 1998. The new date was now end of
January 1998.

THL committed itself firmly to inject DEM […] into
BahnTrans for the business years 1996/1997 and 1997/
1998 each. THL had to pay a further DEM […] per
business year,
if BahnTrans continued to make losses
before taxes in the said business years. As this was the
case, THL paid in full its cash injections amounting to
DEM […] per business year.

III. COMMENTS FROM ABX LOGISTICS (DEUTSCH-

LAND) GmbH

is

the legal

(36) With letters of 15 June 2001 and 5 December 2001,
ABX Logistics
(Deutschland) GmbH (ABX Logistics)
submitted comments on the opening of the procedure.
ABX Logistics
successor of BahnTrans
GmbH. ABX Logistics submitted that all transactions
subject
the procedure had been
conducted under market investor principles. First, ABX
Logistics argued, that DB AG had to pay its share capital
in cash, as it did not have any substantial assets inter-
esting for the business of BahnTrans. Second, due to
constitutional requirements, DB AG was not allowed to
divest itself of assets to the benefit of BahnTrans.

to the opening of

(37)

Concerning the financing of the freight centres, ABX
Logistics
financing was done
according to normal market conditions, and submitted
the relevant agreements.

submitted that

this

(38) ABX Logistics conceded that the railway services of DB
AG were not used as extensively by BahnTrans as origi-
nally expected. However, according to ABX Logistics,
this was done for pure business reasons, and was in the
end for the commercial benefit of the company. THL did

(39) ABX Logistics explains

unjustifiable
commercially
personnel and payment of personnel costs.

that DB AG did not
burdens

take
concerning

(40)

Finally, while ABX Logistics
that price
competition was tough during the time in question due
it denies an
to increased liberalisation of the market,
aggressive marketing strategy made possible by funding
from DB AG.

concedes

(41)

IV. COMMENTS FROM THE FEDERAL REPUBLIC OF

GERMANY

In its letters of 19 February 2001 and 17 July 2001, the
Federal Republic of Germany reacted as follows to the
opening of
the procedure. The German Government
reiterated that no State aid was given, and flows of
money between the Government, via the DB AG, to
BahnTrans had not existed. Opening the procedure in
these circumstances would, according to the German
Government, violate the principle of neutrality of
ownership, enshrined in Article 295 of the Treaty. The
German Government also informed that the German
Court of Auditors, after explanations of the German
Government, had suspended further investigations into
the BahnTrans case.

V. ASSESSMENT OF THE MEASURE

(42) According to Article 87(1) of the EC Treaty, any aid
granted by a Member State or through State resources in
any form whatsoever, which distorts or threatens to
distort competition by favouring certain undertakings or
the production of certain goods is, insofar as it affects
trade between Member States,
incompatible with the
common market.

V.1. The applicable legal test

(43)

Equality between public and private undertakings

The Treaty sets up the principle of neutrality with regard
to the system of property ownership in the Member
States and the principle of equality between publicly-
owned and private undertakings (Articles 295 and 86 of
the EC Treaty). In accordance with those principles, the
Commission must not prejudice or
favour publicly
owned undertakings,
in particular when examining
economic transactions in the light of Article 87(1) of the
EC Treaty. The German State holds 100 % of the shares
in DB AG and appoints the board of DB. The German
State as sole shareholder has the right to give instruc-
tions to the board according to the German Aktienge-
setz. Public authorities exercise directly a dominant
influence by virtue of their ownership over DB AG. DB
AG is thus a publicly-owned enterprise.

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(44)

The German Government, in its letter of 19 February
2001, stated that opening of the procedure in this case
would violate Article 295 of
the EC Treaty. The
Commission refutes this argument. As the Court of First
Instance has clearly pointed out in its judgment of 14
December 2000 (10):

‘if any public funds are provided on terms more
favourable than a private owner would provide them
to a private undertaking in a comparable financial
and competitive position,
then the public under-
taking is receiving an advantage not available to
private undertakings from their proprietors’ (13).

‘To require that the remuneration which a public
undertaking in a monopoly position receives in
return for the provision of commercial and logistical
assistance to its subsidiary should correspond to the
payment which would have been demanded under
normal market conditions, does not prohibit such a
public undertaking from entering an open market
but subjects it to the rules of competition, as the
fundamental principles of Community law require.
Such a requirement does not adversely affect the
system of public ownership and merely ensures that
public and private ownership are treated equally.’

(45)

Thus, the Commission is not challenging the legal and
factual possibilities for publicly-owned enterprises to
invest and expand commercially. However, the publicly-
owned enterprises must be treated on equal terms with
comparable private enterprises (11).

The market economy investor principle

(46)

In assessing the behaviour of DB AG vis-à-vis
is
daughter company BahnTrans and the commercial rela-
tionships and transactions between the two companies
under the State aid rules, the Commission applies the
‘market economy investor principle’. This test assesses
whether a transaction between a Member State and an
undertaking, or, as in the case at issue, between a public
holding company and its subsidiary, contains State aid.
The Commission verifies, whether the transaction took
place in circumstances that would be acceptable to a
private
investor operating under normal market
economy conditions. According to the jurisprudence of
the European Courts,
the public
investor need not be compared with the conduct of an
ordinary investor. The latter provides capital with a view
to realising a profit
term.
However, it must at least be the conduct of a private
holding company or a group of undertakings pursuing a
structural policy and guided by profitability prospects in
the long term (12).

in the relatively short

the behaviour of

(47)

Further, as the Commission has pointed out in its above-
mentioned Communication on financial
transfers to
public companies,

(10) Judgment of

the Court of First

Instance, 14 December 2000,
Case T-613/97, Ufex et al. v. Commission, ECR 2000 II, p. 4055,
paragraph 77.

(11) See also Opinion of Advocate-General

Jacobs, 13 December
2001, Case C-482/99, France v. Commission (Stardust Marine), at
point 47.

(12) Case C-305/89, Italy v. Commission (Alfa Romeo), ECR 1991, p.

I-1603, paragraph 8.

(48)

The State aid rules of the Treaty do not only apply to
purely financial transactions, but also to the provision of
services or the supply of assets on preferential terms
between a holding company and its subsidiaries. The
European Court of Justice has held:

‘the provision of commercial and logistical assistance
by a public undertaking to its subsidiaries, which are
governed by private law and carry out an activity
open to free competition, without normal considera-
tion in return,
is capable of constituting State aid
within the meaning of Article 92 (now Article 87) of
the Treaty’ (14).

(49)

In the case La Poste,
Jacobs
concluded that State aid is involved if the assistance is
provided

the Advocate-General

‘on financial terms that are more favourable than
those which the undertaking could obtain from a
comparable commercial
investor (…). In deciding,
whether there is a subsidy it seems to me that it is
necessary to consider whether a commercial investor
would be satisfied with the level of consideration
received for the assistance, having regard to factors
such as the cost of providing the assistance, the size
of its investment in the undertaking and its return
from it, the importance of the activity of the under-
taking to the investment group as a whole, condi-
tions on the market in question and the period for
which the assistance is granted’ (15).

V.2. Assessment of

the commercial relationships

between DB AG and BahnTrans

The provision of equity capital

(50) Under

the test developed above,

the Commission
concludes that there was no State aid involved in the
provision of DB's capital contribution as full cash
deposit. DB AG acted like a commercial investor. DB AG
gave its capital contribution as a full cash deposit,
because it did not have any contribution in kind of value
to the newly created joint venture. As explained above,
BahnTrans acted solely as a freight consolidator and
forwarder, not as a transporter. It was thus not appro-
priate to contribute rolling stock, equipment or trucks.

(13) Commission communication, OJ C 307, 13.11.1993, p. 3,

point 11.

p. I-3547.

(14) Case C-34/94, SFEI et al. v. La Poste et al. (La Poste), ECR 1996

(15) Advocate-General Jacobs' conclusions in ‘La Poste’, paragraph 61.

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DB AG did not contribute its real property assets to
BahnTrans, as it was more economical to keep owner-
ship of these assets and rent the land and eventual
facilities to BahnTrans. Furthermore, change of owner-
ship in real property would have given rise to real
property sales taxes. Finally, DB AG as company fully
owned by the Federation, is subject to Article 87e(3) of
the Grundgesetz. This article prohibits the DB AG from
selling transport-related assets to companies, in which it
does not hold a majority of shares. As BahnTrans was
owned by 50 % by THL, DB AG was thus legally not
allowed to transfer any assets to BahnTrans. There was
thus a further objective reason for it not to transfer any
assets in kind to BahnTrans.

the

capital

THL brought in a mixed capital contribution. As stated
above.
it gave DEM 45 million in cash deposit and
DEM 19 975 million as contribution in kind, while
DB AG gave
contribution:
following
DEM 64 975 million in cash deposit. The contributions
in kind by THL,
largely trucks and other transport
means, were sold by agreement of 15 March 1995
between BahnTrans and THL Rheinkraft GmbH to the
latter company, and BahnTrans could thus rely on the
cash generated by the sale of the equipment. The value
of the capital contribution of THL had been assessed and
approved as fair and reasonable by the independent
accountants with report of 1 October 1994 (16). The
behaviour of the public and the private undertakings
was therefore largely similar.

The freight facilities

The Commission considers that there was no State aid
involved in the commercial relationships between DB
AG and BahnTrans concerning the agreements relating
to the lease of the freight centres and freight collection
centres. As more fully developed below, BahnTrans
received use of the freight facilities at a price, which
reflected average market conditions. DB AG acted under
normal market considerations, when it fixed the remun-
erations and conditions for the services provided (17). In
analysing the arrangements on the freight facilities, the
Commission has based itself on a comparison of the
prices and conditions requested by DB AG with the
prices and conditions prevalent in the market and being
quoted by and to private undertakings.

Concerning the freight centre Cologne, this was sold by
DB AG and then leased to BahnTrans by Deutsche
Anlagen Leasing, an undertaking fully independent from
DB AG, as it was not owned or in any way connected to
the latter (18). The relationship between BahnTrans and
DAL was a normal commercial one and there is no place
for State aid considerations.

fees and the use fee,

The rental
in the case of the
Regensburg and Bremen freight centres, for actual use
before a formal
concluded,
reflected market conditions. The calculated interest rate
is less than one percent lower than the market rate for

rental agreement was

(51)

(52)

(53)

(54)

five-year mortgages, as calculated by the Deutsche
Bundesbank. BahnTrans paid these use fees based on
capital
interest only for about two and a half years,
before a rental agreement was concluded. In light of the
short pay-back period, it is reasonable to agree a lower
interest rate than for five-year mortgages.

(55) With regard to the freight centre Karlsruhe, the rental fee
has also been shown to be fully oriented on market
rates (19).

(56) Also concerning the rental of the 16 freight collection
centres, DB AG acted like a commercial investor. It even
started out with a proposal for a lease fee, which was
above the normal market rate and was therefore particu-
larly beneficiary for it. Only after negotiations with
BahnTrans was the fee agreed, which reflected normal
market conditions plus a 10 % top-up to the benefit of
DB AG.

(57)

In conclusion, the payments received in return by DB
AG from BahnTrans were fully compatible to payments
demanded by a private holding company not operating
in a reserved sector, pursuing a structural policy and
guided by long-term prospects (20). They do not consti-
tute an aid to BahnTrans.

(58)

(59)

Use of railway for transports

The Commission concludes that
there was no non-
commercial advantage to BahnTrans resulting from the
attitude of DB towards the use of its main product, rail
transport, by its daughter company BahnTrans. DB's
acceptance of decreasing use of rail transport by Bahn-
Trans was dictated by commercial considerations. As
explained above, DB AG was not able to set up 40
combined transport terminals and connect them with
regular train liner services.
Insisting nevertheless that
BahnTrans use 70 % railway transport for its transport
requirements would have meant that BahnTrans would
not have been able to provide its customers with as
rapid and reliable services as its competitors relying on
road transport. This would thus have endangered Bahn-
Trans' going concern. It was therefore crucial that Bahn-
Trans be free in its modal choice to offer a competitive
service.

The private partner THL did not insist on the use of its
road based assets by BahnTrans, either. The exclusivity
agreement lasting for one year was in the interest of
BahnTrans, which could rely on a proven road transport
network, and was thus not in danger of losing THL
Rheinkraft as a subcontractor. Later, there was only an
obligation of first request, which guaranteed BahnTrans
that it could always rely on a road haulier for its liner
services, but at the same time BahnTrans was free to
take any better offer. Both DB AG and THL thus acted
flexibly in the best interest of their daughter company
concerning the transport organisation.

(16) See above, under recital 7.
(17) See above, under recitals 14 et seq.
(18) See above, under recital 16.

(19) See above, under recital 17.
(20) Compare Ufex et al., cited at footnote 10, at point 75.

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Take-over of personnel

(60) DB AG agreed to bridge, for two years, the cost differ-
ence between the higher pay and remuneration benefits
of ex-DB employees now working in BahnTrans, and the
normal pay conditions in the private sector. Given the
marked difference in pay and remuneration conditions,
as mentioned above, it seemed normal for DB AG to do
this under two aspects: first to help its personnel adapt
to the new business environment, and second, not to
overload the new daughter company with charges,
which it would not have had to incur in a private sector
business environment. DB AG thus temporarily relieved
BahnTrans from extraordinary charges it had to face due
to the nature of DB AG as a State-owned company,
which offered its employees special conditions not avail-
able in the private sector. The respective arrangements
aimed at establishing viable business conditions for
BahnTrans, which operated in a very competitive envir-
onment.

(61) Also in this respect, DB AG acted as a normal investor.
Any private holding company not operating in a
reserved sector, pursuing a structural policy and guided
by long-term prospects, tries to ensure that its newly
founded daughter company starts out its business not
unduly burdened by specific conditions and arrange-
these
ments prevalent
arrangements are disadvantageous in the business envir-
onment, in which the daughter company will have to
operate.

in the mother company,

if

(62)

(63)

Marketing strategy of BahnTrans

The marketing strategy of BahnTrans does not yield
evidence of non-commercial behaviour. While
the
Commission notes several alleged cases of very keen and
aggressive pricing of BahnTrans, this behaviour seems in
line with the generally acknowledged behaviour during
the 1990s in the German freight
forwarding sector,
brought about by deregulation and concentration move-
ments. Elements hinting at non-commercial behaviour
of DB AG cannot be detected in this marketing strategy,
and there is no further room for State aid considera-
tions.

Revenue sharing between BahnTrans and DB AG

The revenue sharing between BahnTrans and DB AG
was fully in line with normal commercial practices and
did not provide any unreasonable advantage to Bahn-
Trans. As a rule, a freight forwarder, which does not
operate transport services, must calculate about […] %
of its total turnover as payment for transport services
through third parties. As stated above, this rule is gener-
ally accepted business practice in the market. For the
first two business years of the existence of BahnTrans,
DB AG received even more than industry standards,
namely […] %. For the remaining time of its involve-

(64)

(65)

ment in BahnTrans, the parties agreed on the industry
standard, […] %. In this respect, DB AG acted fully like a
normal commercial

investor.

Cash injections by DB AG

Both THL and DB AG provided, as mother companies,
the same amount of cash injections for BahnTrans, after
a change in strategy had occurred in 1997. Both mother
companies subjected these cash injections to conditions,
which gave them necessary security and fostered their
own business goals. The new strategy, which required
the cash injections, gave DB AG a way to close down its
loss-making freight consolidation activities faster than
originally anticipated, and thus was of monetary value.
DB AG had further commercial benefits linked to the
cash injection, as BahnTrans was obliged to take over a
large number of personnel
from DB AG, as shown
above, largely at its own cost (see recital 27). The same
amount of the cash injections of DB AG and THL and
the measures that DB AG took to protect
its own
commercial interest in the venture, give a clear indica-
tion that DB AG acted as a commercial investor in this
matter. It did not grant any non-commercial advantage
to BahnTrans.

VI. CONCLUSION

In conclusion, all the business relations analysed show
that DB AG acted as a normal commercial
investor
vis-à-vis its daughter company BahnTrans. In the case of
the rental of freight facilities, DB AG negotiated or tried
to negotiate conditions for itself, which were even more
In the
advantageous than average market conditions.
agreements concerning personnel, the behaviour of DB
AG showed the market investor's concern to permit its
daughter company to achieve sustainable viability. DB
AG thus acted as a strategically oriented investor. This
result
the
privately-owned company THL as the other shareholder
acted in a similar way concerning its capital contribu-
tions to BahnTrans, its strategy concerning the use of its
assets (road transport) by BahnTrans, and its capital
injections in 1997. State aid was not involved in the
commercial relations between DB AG and BahnTrans
described above for
the period October 1994 to
June 1998,

is further corroborated by the fact

that

HAS ADOPTED THIS DECISION:

Article 1

The commercial
relationships between DB AG and the
company BahnTrans, do not, for the time between September
1994 and June 1998, entail aid within the meaning of Article
87(1) of the Treaty.

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Official Journal of the European Communities

L 211/15

This Decision is addressed to the Federal Republic of Germany.

Article 2

Done at Brussels, 7 May 2002.

For the Commission

Loyola DE PALACIO

Vice-President