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High cost to Danish tax payers for DSBFirst debt

Monday, 11 April 2011
Danish- British rail company DSBFirst had reported recently that it was going under and that the debt around its neck would see the company offloading many workers. It turns out on Monday that Danish taxpayers are to cover the entire loss if DSBFirst if it is to remain operational to some extent.

This Scottish company First Group is co-owner with the Danish rail company DSB, rail lines that runs on the Danish coastal line and a series of lines in Sweden. But it turns out that DSB did not ask its partner First to help cover the losses that is about to sink them both down. This mistake can now cost the Danish taxpayers a huge amount.

The two joint companies, Danish DSB and British First Group in 2007, won the bid to operate train transport business from Elsinore in Denmark to cities in southern Sweden. That resulted to the formation of a joint company DSBFirst. But reports hold that the two companies have operated their economic resources independently.

Despite the fact that First Goup owns a third of DSBFirst, only DSB has money tied to ailing company and the Danish rail company, DSB, has not asked First to participate in the ongoing funding of the operation.

DSB has now been accused of giving illegal aid to DSBFirst – including through cheap loans seen as short footing competition killer. The first decision now is that the money must be repaid. This means that DSBFirst now owe DSB at least Dkr304 million.

People in the legal sector have called it illegal state aid, and the DSB Chairman Mogens Granborg has confirmed the accusation.

It remains a mystery as to why First Group is not asked to contribute to fund ongoing operations and why the state owned rail company DBS decided to operate the running of DBS FIRST without First putting in resources. We are as well baffled.

In related development, the parties behind the settlement are agreeing on a so-called Plan B in which DSBFirst must give up, to ensure the sustainability of the train transport operations on the route in commands.  Politics has now kicked in and the Danish governing parties, the Danish People's Party, the Radicals and Christian Democrats are agreeing that parent company DSB will take over operation of trains on the Danish lines, i.e. Coast Line between Elsinore and the Airport in Kastrup.

Trains running on the Swedish side of the Øresund Bridge will have to agree with the Swedish authorities. The agreement would also question if during rush hours there could be added trains to travel to Sweden. But basically there will be no correlation or interaction between DSB/First trains operating in Sweden and Denmark.
By Scancomark.se Team

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