New Westbahn Claims Unjustified Subsidies for the ÖBB

The new ÖBB (Austrian Federal Railways) competitor, who intends to operate the Westbahn (Western railway) between Vienna and Salzburg starting in December 2011, is suing the Ministry of Transport. The new Westbahn, a company belonging to Hans Peter Haselsteiner, has filed a state liability claim against the Republic of Austria before the Constitutional Court.

Due to a provision in the Federal Public Procurement Act, it is still possible to subsidize the ÖBB for millions, according to the allegation. The suit was filed in order not to lose any legal rights, according to Westbahn boss Wehinger, a former member of the ÖBB board. He is threatening with further action in case no fair framework conditions are implemented. The new Westbahn’s solicitor is a former justice minister, Dieter Boehmdorfer.

The conflict stems from the liberalization of rail transport in the EU. In addition to freight traffic, private providers may now compete with the state railways for passenger services. Consequently, there are also new regulations for railway subsidies: they may only be awarded without a call for tenders for a maximum of 15 years for the last time.

"Instead of making the ÖBB fit for the deregulated market, they are trying to maintain the privileges of the state railway in the new era with all kinds of legal tricks", according to Wehinger. His criticism refers to the abolished limit of 100,000 euro for the direct award of service concessions in the Public Procurement Act, as this was repealed by the amendment since the end of 2010.

Subsidies for the ÖBB amount to 600 million euro so far. The Audit Court has criticized the fact that their purpose is not clear. There should be no subsidies for profitable routes. However, this is exactly what the new Westbahn is fearing.

Sources from the Transportation Ministry said the allegations of the Westbahn are incomprehensible.  ÖBB boss Christian Kern, also pronounces himself over the accusations. "I read that there are private providers, who before they have even driven one kilometer with the train, are already queuing up for tax money. I find this interesting and exactly as I have always imagined private competition".