• Germany edition
 
Opinion
'Put Germany's flagship projects in private hands'
Berlin's new airport has become a byword for failed public sector projects in Germany. Photo: DPA.

'Put Germany's flagship projects in private hands'

Published: 19 Nov 2013 10:40 GMT+01:00
Updated: 19 Nov 2013 10:40 GMT+01:00

Cost-explosions and huge delays at large-scale infrastructure projects are the norm rather than the exception in Germany. Economist Frederik Roeder argues the private sector should be put in charge.

Public projects such as the Stuttgart train station project, ‘Stuttgart21’, the new philharmonic hall ‘Elbphilharmonie’ in Hamburg, the new headquarters of the European Central Bank (ECB) in Frankfurt, or Berlin’s attempt to build an international aviation hub, are just the most prominent examples that illustrate Germany’s problems with budgeting and realizing public infrastructure projects. 

The odyssey of the new airport Berlin Brandenburg International (BER) is a particularly good example of why infrastructure projects are better planned, funded and realized by private investors rather than the public sector.

German aviation export Dieter Faulenbach da Costa called the construction flaws in BER so dramatic that the city should tear down the entire airport and rebuild it from scratch.

After German reunification, Berlin had three airports coping with growing passenger numbers. Political considerations meant planners spent 15 years selecting a location to bundle Berlin’s air traffic to one large airport.

Two annulled public tenders later, the mayor of Berlin and the governor of Brandenburg decided to discard the common concept of having a general contractor overseeing the construction and supervise hundreds of contractors by themselves.

That decision transferred any liability from the private sector to the taxpayer.

No end in sight

Invitations for the grand airport opening party in June 2012 had been already sent out when management had to admit that they would not meet the deadline. The fire safety authorities had not approved the airport’s smoke extraction system.

Der Spiegel reported that planners decided the terminal building would not have any smoke extraction tips on its rooftop for purely aesthetic reasons.

Smoke would be pumped into exhaust pipes located below the building - a very unique way to direct smoke, as hot air naturally rises up.

The airport management and politicians overseeing them still cannot give a precise estimate for when the airport can actually start facilitating air traffic.

The last 18 months have mainly consisted of assessing what is not working at the airport. So far more than 66,000 deficiencies have been identified.

Handelsblatt newspaper estimates the additional costs of maintaining three airports at the same time - with just two of them generating revenues - are up to €40 million a month.

This does not include costs for potential compensation vendors and airlines are suing the government for.

Rental car companies and restaurant operators had already equipped their stations and shops at the new airport, but do not generate any revenues while their assets depreciate. Airlines had already scheduled new routes and sold tickets for those.

Once BER will actually start operating it will already be at maximum capacity and extensions will be immediately necessary in order to cope with growing passenger numbers.

A lesson from the private sector

The decisions to fund, build and operate BER by the public sector neglects the success stories of the two largest German airports, Frankfurt and Munich.

While Berlin’s airport story developed into a never-ending tale of scandals and failure, Frankfurt and Munich expanded their capacities by benefiting from private capital and know-how that helped shape the future of those hubs.

Frankfurt’s publicly listed Fraport owns and operates airports around the world. Munich’s airport planned the two most recent extensions jointly with Lufthansa, which owns 40 percent of the main terminal.

But in Berlin the failures of politicians to directly oversee the construction of an airport has led to cost explosions and continuously deprives Berliners of the ability to be well-connected to the rest of the world.

So far construction costs have jumped from the initially planned €2 billion to more than €5 billion. Further increases are very likely since no-one knows when the airport will actually start catering flights to the world.

The lessons of BER and other prominent public infrastructure projects in Germany show that the liability for large infrastructure projects should lay in private hands and that excessive state spending leads to a waste of taxpayers’ money. It delays the realization of much-needed infrastructure.

Stories about the construction of bank towers or private airports being delayed for decades and costing four to ten times more than budgeted are rare. And even when they occur, shareholders, and not taxpayers are on the hook.

Frederik Roeder is an economist and director at NGO Young Voices.

READ MORE OPINION: 'Why Germany can't produce a breaking bad'

For more stories about Germany, join us on Facebook and Twitter

The Local (news@thelocal.de)

Don't miss...X
Left Right

Your comments about this article

Today's headlines
Croatia extradites ex-top spy to Germany

Croatia extradites ex-top spy to Germany

Croatia extradited a former Yugoslav spy chief, Zdravko Mustac, to Germany on Thursday to face charges for the 1983 murder of a dissident on German soil. READ () »

German court jails Somali pirate for 12 years
An officer of the Lower Saxon Criminal Investigation Department (CID) securing evidence on the hijacked ship Marida Marguerite. Photo: DPA

German court jails Somali pirate for 12 years

A German court has sentenced a Somali pirate chief to 12 years in jail for hijacking a ship off the Horn of Africa and tormenting its crew during an eight-month ordeal. READ () »

New app helps clients find prostitutes
Photo: DPA

New app helps clients find prostitutes

While the German government is considering tightening prostitution laws, Berlin entrepreneurs have developed a smartphone app to connect sex-workers with clients. READ () »

Highs of 22C forecast for Easter weekend
Photo: DPA

Highs of 22C forecast for Easter weekend

The days running up to Easter may be cool and wet, but the holiday weekend should be a bit warmer for most of Germany, according to forecasters. READ () »

Berlin man must call himself a mother
The fight over the transgender man's right to be his child's official father has been raging since last year. Photo: DPA

Berlin man must call himself a mother

A transgender person who became the first man in Germany to give birth in March 2013 must be registered as the child's mother, a court has ruled after his year-long court battle to be named a father. READ () »

Study: rape convictions fall sharply
Photo: DPA

Study: rape convictions fall sharply

The chance of being convicted of rape in Germany has more than halved in the past two decades to fewer than one in ten, a major study revealed on Thursday. READ () »

SPD: Restore 45-percent investment tax
The tax privilege for investment income is unfair, says the SPD. Photo: DPA

SPD: Restore 45-percent investment tax

The centre-left half of Germany's coalition government has called for the old top rate of a 45-percent tax on investments to be brought back - to match standard income tax and fight the squeeze on middle incomes. READ () »

Customs find smuggled cash in every third car
Sniffing out the money. Photo: DPA

Customs find smuggled cash in every third car

The number of Germans smuggling large amounts of cash across the Swiss border into Germany rose dramatically last year. Customs officers said on Thursday they made a find in almost every third car they checked. READ () »

Crystal meth use hits record level
Crystal meth seized in Bavaria. Photo: DPA

Crystal meth use hits record level

Consumption of crystal meth in Germany appears to have reached a record level, according to government figures published on Thursday. READ () »

Child's near death sparks row over refugee homes
Leonardo had to have a finger and toe amputated after staff refused to call an ambulance. Photo: DPA

Child's near death sparks row over refugee homes

A political row has broken out in Bavaria after an asylum seekers' home failed to help a toddler who almost died of meningitis. The case has raised concerns about the treatment of refugees in the state. READ () »

RECEIVE OUR NEWSLETTER AND ALERTS
Photo: DPA
Rhineland
Elderly man taped €200,000 to his genitals
Photo: DPA
Business & Money
What's the unemployment rate in your area of Germany?
Photo: DPA
Gallery
Nine ways to celebrate Easter like a German
Photo: Galerie Bilderwelt
Gallery
World War I in colour photos
Photo: DPA
Society
'The mafia has infiltrated every sector in Germany'
Photo: DPA
Society
JobTalk: Why you should teach English in Germany
Photo: DPA
National
330,000 sign up against TV licence fee
Photo: DPA
Hamburg
School kids hospitalized after 'porno' party
Photo: Submitted
Frankfurt
'I'll get even with my old pal Schwarzenegger'
Photo: DPA
Gallery
The week in pictures: April 5th - April 11th
Photo: DPA
Gallery
Ten great inventions you (probably) didn't know were German
Photo: J. Arthur White
Berlin
Clashes in Berlin as refugees tear down their own camp
Advertisement:
Photo: DPA
Gallery
Munich's baby polar bears are finally named
Photo: DPA
Gallery
The 10 best German employers to work for
CurrencyFair
Sponsored Article
Why it pays to avoid banks when making overseas transfers
Mr. Lodge
Sponsored Article
How to find a furnished rental in Munich
Sponsored Article
How to make a lasting impression in business
Hult International Business School
Sponsored Article
What they don't teach you at Business School
Photo: DPA
Society
Nine jobs you can only do in Germany
Photo:ESL
Sponsored Article
How to integrate successfully in Germany
Photo: DPA
Business & Money
JobTalk: All you need to know about working in Germany
Photo: DPA
Features
The Local List Archive - Your guide to all things German
National
Share news tips with The Local Germany
Latest news from The Local in Switzerland

More news from Switzerland at thelocal.ch

Latest news from The Local in Spain

More news from Spain at thelocal.es

Latest news from The Local in France

More news from France at thelocal.fr

Latest news from The Local in Italy

More news from Italy at thelocal.it

Latest news from The Local in Norway

More news from Norway at thelocal.no

Latest news from The Local in Sweden

More news from Sweden at thelocal.se

3,146
jobs available
Toytown Germany
Germany's English-speaking crowd