Other issues

Project risks

Our measures involve not only some large capital expenditure volumes, but also a large number of highly complex projects. Changes to the legal framework, delays in implementation (due among other things to more extensive public participation), necessary adjustments during terms often lasting several years, deviations from the ramp-up curve of funds for capital expenditures agreed with the Federal Government, or changes to purchase prices may lead to project and liquidity risks. The networked production structure means that these can also affect a number of business units. For example, in such cases planned modal shifts from road to rail will not be feasible. We keep up to date with this by closely monitoring projects. This applies in particular to large, centrally managed projects.

In implementing the planned measures from various programs, such as the Agenda for a Better Railway for the integrated rail system, or Primus at DB Schenker, there is the risk that it will either not be possible to implement the planned effects at all, or only to a limited extent, and/or with delays. At the same time, however, there is also the opportunity to exceed the planned effects.

Infrastructure financing

As a key element of the German Rail Reform, the Federal Government has the constitutional obligation to finance capital expenditures in rail infrastructure. The key factor here is securing sufficient funding, but also the ability to plan the availability of funding for the existing network as well as new construction and expansion (requirement plan capital expenditures). A limited availability may lead to less funding being available to maintain the existing network or overcome shortages, thereby restricting the competitiveness of rail as a mode of transport.

We have an agreement with the Federal Government that sets out the financing of the existing network until 2019. The LuFV II and the associated long-term secur­­­ing of infrastructure quality and availability improve the attractiveness of rail as a mode of transport in the long term, which also results in higher revenues for infrastructure companies. Negotiations regarding a successor agreement (LuFV III) are ongoing.

The profits of infrastructure companies in turn are plowed back into the infrastructure via the financing circle. Risks result from a potential failure to achieve the contract objectives specified in the LuFV II and from a possible reclaim by the Federal Government based on an audit of the proper application of funds.

The economic sustainability of capital expenditures or contributions to capital expenditure projects funded with DB funds is essential to ensure DB Group’s ability to invest in the long term.

Political risks

DB Group is active in Great Britain through DB Arriva, DB Schenker and DB Cargo. The ongoing uncertainty regard­­ing the modalities of Great Britain’s exit from the European Union (Brexit) poses a risk to our activities. Here, it is primarily a weakening of the British economy and new trade restrictions hindering freight transport that may have a negative impact. DB Group is counteracting this risk by pre­­­­paring as best as possible for a so-called “disorderly Brexit” (Brexit without any exit agreement).

EUROFIMA has given loans to state-owned railways in states that now have poor credit ratings. If these state-owned railways fail to meet their financial obligations to EUROFIMA, this could have repercussions for the carrying amount of the investment, and under certain circumstances trigger further financial obligations.

Environmental risks

Unique environmental features, such as climate-neutral transport services in passenger and freight transport on the basis of renewable energies, improve our customers’ positive opinions and thus improve our external perceptions. This results in considerable opportunities. Our activities have a positive effect on the reduction of green­­house gases and can also have a positive influence on customer satisfaction and our market position. Our mobility offer must become CO₂-free throughout in order to secure the climate advantage.

Strengthening of environmental protection laws also presents opportunities and risks for DB Group. Opportunities arise primarily for the public passenger transport, particularly rail transport. However, measures such as bans on diesel may also have negative impacts on our bus service activities.