August 11, 2016

Nuremberg S-Bahn legal dispute rumbles on

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GERMAN Rail (DB) announced on August 10 that its subsidiary DB Regio has lodged an appeal at the regional high court in Munich against a ruling by Bavaria’s public procurement authority which upheld the decision by Bavarian Railway Company (BEG) to award two contracts for the operation of the Nuremberg S-Bahn network to National Express.

BEG selected National Express as preferred bidder in February 2015 for a contract to operate the 272km network for 12 years from December 2018. DB Regio subsequently launched a legal challenge against the award and in September 2015 the regional high court instructed BEG to suspend the procurement until it could prove that National Express had provided adequate financial performance guarantees for the concession.

The court did not rule whether the guarantees offered were sufficient, but noted that they depended heavily on the revenues from National Express Rail's first German regional rail contract in North Rhine Westphalia, which began in December 2015. The court also said that the financial guarantees of the British parent company could not be taken into account and ruled that BEG should scrutinise only the financial capacity of its German subsidiary National Express Rail Deutschland.

BEG subsequently appointed an auditor to analyse compliance with the court’s legal opinion and this concluded that National Express would meet the provisions specified by the court.

Bavaria’s public procurement authority ruled recently that that the financial structure behind the National Express bid has been properly assessed.

With the procurement already many months behind schedule, politicians and unions have raised concerns in recent weeks that the start of the new contract will be delayed, with implications for the introduction of new trains.

 

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