German govt rows with DBahn over rail upkeep-paper

BERLIN, June 27 (Reuters) - Germany's finance minister and Deutsche Bahn [DBN.UL] are locked in a dispute over financing the upkeep of the rail operator's track network after its planned partial privatisation in November, a newspaper reported.

Finance Minister Peer Steinbrueck wants to cut the amount of money the government plans to make available for the upkeep of Bahn's rail network after the sell-off, the Frankfurter Allgemeine Zeitung (FAZ) reported.

A Finance Ministry spokesman declined to comment on the report, as did a spokesman for Deutsche Bahn.

Steinbrueck wanted to make 2 billion euros ($3.15 billion) of state funds available annually over a 10-year period for investment in the rail network instead of 2.5 billion originally envisaged, the FAZ reported.

Of the 2 billion euros from the government, 500 million would be in the form of interest-free loans, which Bahn would then have to raise, the FAZ added, citing no source.

Under the planned partial privatisation, the government will sell just under a quarter of the company's transport, logistics and services business to private investors. Its rail tracks, stations and energy supply unit will remain in state hands.

The government expects the sale to raise between 5 and 8 billion euros.

Steinbrueck wanted to limit state spending on the rail system to be able to achieve a balanced budget in 2011, the FAZ reported. (Reporting by Paul Carrel; Editing by Brian Moss)