German government to quiz Deutsche Bahn over fraud allegations

The German government is to quiz Deutsche Bahn’s executive board over allegations of fraud made by two whistleblowers regarding the €8.2bn construction of a new station in Stuttgart.

The state-owned railway operator in 2016 received repeated warnings that cost inflation at Germany’s largest infrastructure project was caused by glaring mismanagement and suspected corruption, the Financial Times reported last week.

The transport ministry in Berlin told the FT on Monday that the federal government was “actively working towards raising and critically challenging the reported events”.

Deutsche Bahn declined to comment on the transport ministry’s statement. Last week, the company promised “maximum transparency” and told the FT that it would disclose the results of its internal probe to “authorised parties”. The €40bn company stressed that it had investigated “all available allegations regarding the issue thoroughly based on its internal standards and the law” and that no violation of law was found.

One of the whistleblowers, a Deutsche Bahn veteran with more than two decades of experience in cost allocation of large investment projects, in 2016 estimated the financial damage from observed misconduct stood at €600m, according to a document seen by the FT.  

The second whistleblower was fired just weeks after a final meeting with investigators that took place in November 2016, documents seen by the FT show. Deutsche Bahn says that the dismissal was unrelated to the whistleblower complaint — a view that was upheld by a Stuttgart court in July.

Criminal prosecutors in Stuttgart told the FT last week they had previously been unaware of the whistleblower complaints and were reviewing the matter.

Winfried Hermann, the Green transport minister for the state of Baden-Württemberg last week criticised Deutsche Bahn for failing to brief the state on the whistleblower allegations and its investigation.

“The state is providing significant funding [for the Stuttgart station] and is entitled to receive comprehensive information,” said Hermann, adding that his ministry would formally ask the railway operator for an explanation.