THE German railway group which owns Arriva and the Tyne and Wear Metro is being investigated for anti- competitive practices.

The European Commission has confirmed reports in the German Press that this week its officials made raids on offices of the company and some of its subsidiaries.

The commission confirmed it is investigating whether the national rail operator may have breached EU anti- trust rules that prohibit the abuse of a dominant market position. They are looking at whether Deutsche Bahn Energie, which supplies electricity for traction trains in Germany, may have given preferential treatment to the group’s rail freight arm.

Meanwhile, the group yesterday posted strong profits and sales for 2010 while warning that sales may slow again this year.

Deutsche Bahn group paid £1.6bn for Sunderland-based bus and rail company Arriva at the end of August and began operating the Tyne and Wear Metro on behalf of Nexus on April 1.

The state-owned railway posted bottom-line earnings of up 27.5% to £1.32bn, as revenues rose by 17.3% to £30bn. Core operating profit was 10.7 % higher at €1.87bn.

Finance director Richard Lutz said that “after the catch-up effect in 2010, we will not have similar rates of growth in 2011.”

But he added that earnings would get a boost with the final consolidation of figures from the British group Arriva that Deutsche Bahn bought in April 2010.

However, the company’s passenger operations were weaker, with sales on long-distance routes up 4.6% to £3.3bn and regional services fell by 0.4% to £6.68bn.

Passenger business, although the biggest contributor to the group’s revenues, was down 18.9% to £644m after a bad year for delays and cancellations on its German services.