Monday 28 September 2020

EU agrees $7bn plan to aid Covid-hit transport firms

BRUSSELS, August 9, 2020

The European Commission has approved a €6 billion ($7 billion) German scheme to compensate companies providing regional and local public passenger transport services in Germany for the damage suffered due to the coronavirus outbreak and the emergency containment measures introduced in Germany to limit the spread of the virus.

Executive Vice-President Margrethe Vestager, in charge of competition policy, said: “Local and regional public transport providers have continued to provide essential services to citizens during the coronavirus outbreak.

“This €6 billion scheme enables Germany to compensate them for the damage suffered due to the outbreak and the emergency measures put in place to limit the spread of the virus. We continue working with all Member States to ensure that national support measures can be put in place as quickly and effectively as possible, in line with EU rules.”

The German government has put in place emergency measures necessary to limit the spread of the coronavirus such as the closure of schools and nurseries, extended telework arrangements, social distancing rules and restrictions on gatherings.

This has severely affected regional and local public transport services, as passenger numbers in local public transport by road and rail decreased between 70% and 90%, resulting in a significant drop in revenues. Furthermore, transport operators had an obligation to maintain a sufficient frequency of regional and local passenger transport services to ensure mobility of people without access to alternative means of transport, including critical workers such as health professionals.

The situation was exacerbated by additional costs incurred by transport operators in relation to measures aimed at containing the spread of the contagion, such as enhanced sanitary and hygiene measures. All of this has led to serious liquidity problems that risk driving many of the transport operators out of the market.

The German scheme is designed to compensate each operator of regional and local public transport services for the damages suffered while fulfilling their contractual obligations under the circumstances determined by the coronavirus outbreak and the resulting containment measures.

Under the scheme, transport companies will be entitled to compensation in the form of direct grants for damages incurred between March 1 and August 31, 2020. Germany will ensure that no individual transport operator receives more in compensation than it suffered in damages and that any payment in excess of the actual damage is recovered.  – TradeArabia News Service


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