Volkswagen agrees $670 million payout to German ‘dieselgate’ victims

Volkswagen reached an out-of-court settlement with the VZBV at the end of February to provide compensation for 260,000 eligible customers. (Reuters)
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Updated 20 April 2020

Volkswagen agrees $670 million payout to German ‘dieselgate’ victims

  • Owners will shortly receive a binding agreement from Volkswagen and have two weeks to review the offer
  • Boss Herbert Diess is among high-ranking current and former board members under criminal investigation

BERLIN: Volkswagen has agreed to pay $670 million in compensation to 200,000 car owners in the biggest German lawsuit over the group’s “dieselgate” emissions cheating scandal, the company said Monday.
Owners will shortly receive a binding agreement from Volkswagen and have two weeks to review the offer before the money is paid out from May 5, the company and the VZBV federation of consumer groups said.
VW reached an out-of-court settlement with the VZBV at the end of February to provide compensation for 260,000 eligible customers of up to $902 million (€830 million) in total.
The “high number of settlements” was proof that the offer was “perceived as fair,” said Hiltrud Werner, head of integrity and legal affairs on the Volkswagen board.
Car owners will receive between €1,350 and €6,250, depending on the age and model of their vehicle.
According to Volkswagen, a remaining 21,000 cases are still to be processed in coming days.
The company has extended the deadline for consumers to upload their documents to its online portal until April 30.
The settlement puts an end to a first-of-its-kind collective lawsuit brought by 400,000 diesel car drivers.
VW has been battling to turn the page since its 2015 admission to fitting 11 million vehicles with software to make their diesel engines appear less polluting in regulatory tests than in real driving conditions.
Aside from the 400,000 diesel owners in the VZBV’s grouped proceeding, around 70,000 individuals have open claims against VW.
In May, one individual’s case will be heard at Germany’s top administrative court.
Plaintiffs whose cases were included in the mass suit had the choice either to accept the settlement by April, or to file an individual suit by October.
So far the fallout from the scandal has cost VW more than €30 billion worldwide in legal costs, fines and compensation, most of it in the United States.
It has paid just €2.3 billion in fines in home country Germany, while boss Herbert Diess is among high-ranking current and former board members under criminal investigation.
Investors are also pursuing the company for compensation over their losses from the plunge in its share price after the diesel cheating was revealed.


India opens vast railway network to private players

Updated 02 July 2020

India opens vast railway network to private players

  • The 167-year-old train network carries 20 million passengers daily
  • India’s railway ministry said it would now permit businesses to run trains along 109 routes
MUMBAI: India has opened up its vast railway sector to private companies, allowing firms to operate trains on certain routes, in a bid to boost its stuttering, virus-hit economy.
The 167-year-old train network carries 20 million passengers daily but is plagued by deadly accidents, rickety infrastructure, lack of modern amenities and poor investment.
In an announcement late Wednesday, the railway ministry said it would now permit businesses to run trains along 109 routes, inviting bids from firms weeks after New Delhi opened up coal mining to the private sector.
“This is the first initiative of private investment for running passenger trains over Indian Railways network,” the ministry said in a statement.
“The objective of this initiative is to introduce modern technology rolling stock with reduced maintenance, reduced transit time, boost job creation, provide enhanced safety, provide world class travel experience to passengers,” it added.
The project will require an investment of $39.8 million and private players will have to pay the government fixed haul charges and a percentage of profits determined during the bidding process.
Prime Minister Narendra Modi has sought to privatize a range of industries that have been under state control for decades, sparking criticism from the opposition Congress party.
“Now the government is in a desperate mood to sell a great chunk of one of our largest national asset #IndianRailways,” Congress politician Adhir Ranjan Chowdhury tweeted.
“Privatization cannot be construed as a panacea of railways malady,” he added.
The tottering network is notorious for accidents, with 15,000 passengers killed every year according to a 2012 government report that described the deaths as a “massacre.”
Asia’s third-largest economy has been clobbered by the pandemic and a months-long lockdown, growing at its slowest pace in at least two decades last quarter.
The shutdown, which put millions out of work overnight, is widely expected to plunge the country into recession.
Fears for the economy prompted the government to allow many businesses to resume operations starting last month despite an ongoing increase in infections, which have now crossed 600,000.
Even before Modi announced the lockdown in late March, the economy was struggling to gain traction with sluggish growth, record unemployment and a flurry of bad loans making banks reluctant to lend.