The initial public offering of German railway operator Deutsche Bahn, which has been postponed due to financial market turmoil, is unlikely to go ahead this year, Chief Executive Hartmut Mehdorn said.
"I'm not ruling it out," Mehdorn said, when asked whether the IPO could go ahead before the end of the year. "But it is not likely," he told Reuters in Abu Dhabi, where he accompanied German Foreign Minister Frank-Walter Steinmeier on a trip that also included Saudi Arabia.
"We're watching the situation very carefully. As soon as conditions allow, we can speed ahead."
Mehdorn said the company could proceed with the IPO at short notice, or within about two weeks of submitting relevant documentation to financial regulator Bafin, and that it continued to gauge investor interest.
"We have talked with many large investors. I will stay on for another two days after the minister leaves and will meet with big banks and investors in Dubai, Abu Dhabi and Qatar," he said.
The Bahn IPO has been controversial among Germany's Social Democrats, who share power in an uneasy "grand coalition" with Chancellor Angela Merkel's conservatives at the federal level. Some analysts say Bahn wants to prevent a long delay of the IPO because of fears that a general election scheduled for the autumn of 2009 could turn the partial privatisation into a hotly debated campaign issue.
"Of course, I'm worried about the political process starting again. But you can't change that," Mehdorn said. Deutsche Bahn has been looking to expand its presence in the Gulf as regional economies buoyed by a rise in oil prices over the past few years are moving to expand their economies. Bahn has signed a deal to help design a multi-billion dollar rail network in the Gulf Arab state of Qatar.
Mehdorn said under the project, his company aimed to present a plan for two high-speed railways lines and an urban rail system for Qatar by the end of this year.
"It's a volume of around 8 billion euros. I think one will be able to begin construction in around three years. Many local firms will be doing the constructing." The German railway operator is also among the bidders on the Saudi Landbridge project, an estimated $5 billion contract to build a 1,100 km railway across Saudi Arabia's desert. "We expect a decision on the Landbridge in the next few weeks," Mehdorn said.