DaimlerChrysler has warned that the termination of a contract to operate a highway tolls system in Germany could substantially burden its earnings and finances.

According to Dow Jones, in its preliminary annual report, the company said the cancellation could have “a substantial, negative impact on (its) operating results and financial condition.”

The report noted that, earlier this week, Toll Collect, the consortium led by DaimlerChrysler and Deutsche Telekom to operate a German toll road system, received notification that the government intends to cancel the contract.

Toll Collect has two months to meet the government’s demands. If it fails, the contract will be terminated, Dow Jones said.

The government reportedly has said that it plans to seek at least €6.5 billion in damages related to the failed toll system which was plagued by technical problems which led to repeated delays to the start and to lost revenue for the government.

According to Dow Jones, DaimlerChrysler said it has written off its investment in Toll Collect and established a provision of €100 million to account for it.

The company also reportedly said its potential exposure to Toll Collect could exceed that.

Dow Jones noted that DaimlerChrysler CEO Juergen Schrempp said on Thursday at the company’s annual earnings press conference that he still believes the government and the Toll Collect consortium could iron out their problems and come to a new agreement.

Schrempp reportedly said he wants to “find a solution as soon as possible” – which he said could be as early as the next 10 days.

Schrempp also said the problems are surmountable and that he still believes in the system and thinks it could become the standard for Europe. The consortium is doing “everything it can to come to a solution,” he said, according to Dow Jones.