In fact, on 1 January, a central company in federal jurisdiction is to assume sole responsibility for road construction. However, design errors and constitutional and procurement hurdles are throwing the plans over the top. For the time being, the authority can start at half-strength at best, and with great staff cuts. Experts expect full working capacity in five years at the earliest. Almost self-evidently, the project is also more expensive than estimated, which the Federal Transport Minister prefers to keep to himself.
Andreas Scheuer could almost feel sorry for you. No matter what he tackles, nothing, but nothing at all, wants to succeed the Federal Minister for Transport and Digital Infrastructure (BMVI). Since the day of his inauguration, the CSU man has been supplying scandals in series. His stubborn advocacy for the car industry is already legendary, his attempts to trivialise the emissions scandal highly distressing, and his verdict that a speed limit on German motorways is “against all common sense,” below all levels. At the top of the list of his defeats is undoubtedly the colossal failure of his “foreigner toll,” which could cost the taxpayer well over half a billion euros. But the case, which now employs a parliamentary committee of inquiry, still outshines other comparatively minor failures, which makes it advisable to immediately rename his ministry “for failure and incompetence.”
But none of this is really fun, and Scheuer does not fail for his pleasure, as little as his predecessor and party friend Alexander Dobrindt, who has done a lot for him in terms of ridicule. Both have been called upon to represent powerful interests, and anyone who does so, like them, without any regard for loss, will inevitably get a bloody nose. One could also say that Scheuer holds his head for the interests of those whose flag he holds up. His constituents are not meant by that. The car toll was only ostensibly about the service to his CSU beer tent clientele, even if it was transported in this way by the media. The car toll should never be just a satisfaction for Bavaria’s motorists for having to pay for traffic on Austria’s roads, for example. The project was always involved in a larger planning game to establish a general toll in Germany in the medium term.
In this context, Scheuer’s next slap can be seen, with which he is making headlines these days. This is about the “Autobahn GmbH of the Federal Government”, in short: “The Autobahn”. The company was founded two years ago with the aim of transferring responsibility for the planning, construction, operation and maintenance of German trunk roads to the federal government as of 1 January 2021. So far, the 16 federal states are doing this. Although they receive the money for this from the federal treasury, the implementation of the projects is their own responsibility. In the summer of 2017, the rules were changed as part of a comprehensive reorganization of the financial relations of the federal and state governments to combine the competences in a central “infrastructure company transport” under the care of the Federal Government.
The reform drew critics at the time, who warned of a “functional privatisation” of road construction, with private investors earning a golden nose. In fact, the construction is precisely designed for this purpose: by being written under private law, the GmbH is formally subordinate to the confederation, but can operate independently and away from parliamentary control and borrow money on the private capital market. While a large number of new, expansion and refurbishment projects are already being implemented by means of public-private partnerships (PPPs), this is likely to become the standard model under the conditions of the Autobahn Society. The Federal Audit Office (BRH) and the Courts of Auditors of the Länder have already demonstrated the devastating consequences for the taxpayer with a number of audits – but so far without consequence.
Investments for banks and insurance companies
This is another evidence of ministerial sacrifice. Scheuer could be reprimanded for his PPP passion and beaten until the doctor comes, and yet he would refuse any therapy. Because there is more at stake than his personal dignity. The idea for Autobahn-GmbH had once hatched the so-called Fratzscher Commission, appointed by former Economy Minister Sigmar Gabriel (SPD), headed by Marcel Fratzscher, head of the German Institute for Economic Research (DIW). In 2014, the circle of market-liberal economists and representatives of the financial industry was tasked with identifying highly profitable investment opportunities for banks and insurance companies hit by low interest rates “to strengthen investment in Germany.” This led to a plan to open up road construction to private profit interests even more than it does today, so that the alliance, for example, can make up for its slump in profits suffered after the 2008 financial crisis. And the German motorist should bleed for this in addition to the taxpayer.
The sale of the road network was outlined in various reports by the auditors of Pricewaterhouse Coopers (PwC) and the law firm Graf von Westphalen (GvW), about which the “Berliner Zeitung” reported at the time. For example, Graf von Westfalen stated that “in perspective, the financing of the federal motorways on the basis of funding amounts provided directly by the user should be entirely secured and processed outside the federal budget (“Road financed road”). He went on: “It should be possible to develop external funds where necessary, for example through the possibility of borrowing and the opening up of private equity capital at project level, where this is economic.” PwC even explicitly took up the “foreigner toll” and stated that “the infrastructure levy will increase if the truck toll is not sufficient to cover the costs”. In practice, therefore, “an adjustment between truck tolls and infrastructure levy will be necessary”.
Long-term destination: general toll
The PPP critic and administrative lawyer Holger Mühlenkamp already decided at the end of 2016: “I firmly expect that there will be a general toll in this country sooner or later,” he said at the time in an interview with the daily newspaper “Junge Welt” (behind the payment barrier), and went on to say that Dobrindt’s “foreigner toll” would probably only be the prelude to this. “You can’t get past the toll when it comes to attracting private investors to the cause.” Asked whether the state would soon consider a private-law company with the aim of making infrastructure projects more expensive than necessary in order to increase the profits of investors, Mühlenkamp said:
“That’s what it looks like.”
Back to the present and to Scheuer’s next big fall, so great that experts are already comparing the genesis of Autobahn-GmbH with the debacle of the capital airport BER, as the Handelsblatt wrote a week ago. In the text: “The reform, which has so far swallowed up half a billion euros, is already considered to have failed at its start.” As planned, the company was to gain sole control over highway construction at the beginning of 2021 and free the federal states from their decades-long responsibility. The matter, however, has a huge catch in the form of the “Deutsche Einheit Fernstraßenplanungs- und -bau-GmbH” (Deges). The state-owned company is the central and by far the most operational Auo railway authority in the Republic. It implements major transport projects for twelve federal states, which together hold a two-thirds majority, the rest belongs to the federal government. Deges currently trains just over 200 large-scale projects with a contract volume of just under 22 billion euros. In other words, it was a primary objective to let the company become part of the Autobahn-GmbH in order to take over its tasks from now on.
Expensive mammoth authority
Nothing became of it and will soon become nothing. According to a “Focus” report on Monday, Scheuer’s ministry had to admit in response to a question from the FDP parliamentary group that the Deges will continue to operate independently and continue ongoing projects at least next year. The background is constitutional and procurement law concerns, which the Federal Audit Office had once again declared. In the event of a hasty merger of the two companies, all contracts would therefore have to be re-tendered, which would severely imply the already corona-stricken construction industry.
So the government had no choice but to pull the strings. But with what consistency? The ongoing Deges projects can now be continued, so that practically everything stays the same at first. In addition, however, a mammoth authority must be maintained more, which is condemned to extensive inaction. To put it bluntly, taxpayers are peddling a motorway society that cannot build motorways for the time being. In the coming year, more than two billion euros have been budgeted for the management of the store alone. The burden has only been small-scaled with all sorts of savings efforts of the original 2.6 billion, but this is still not enough to meet the federal budget’s 2021 target of EUR 1.4 billion. After all, in the next four years, additional cuts of EUR 1 billion are intended to prevent expenditure from getting out of hand. The management reckons that these reductions “may necessarily lead to operational restrictions, especially in the areas of operation, planning and construction, the extent of which is currently difficult to predict.”
This is written in the “Economic and Financial Plan” of the society, from which the press has already diligently quoted and which is also available to the post-think-only pages. Scheuer did not present the figures to Parliament, even though yesterday, On Thursday, the budget politicians had to discuss the transport budget. The document contains a lot of more explosiveness. For example, there is a shortage of staff: of the 13,660 full-time employees who were to be recruited from the disbanded country locations of the countries, only about 10,000 are on board so far. It is said that many of those affected have fled to other authorities or to the private sector. At that time, it was the SPD faction that worked in the negotiations to ensure that “no one has to change against his will or give up his ancestral place of work”. It was a fine move, but it inflated the structures. In addition to the ten branches and 41 branch offices, 190 motorway masters are operated because of the concessions. In addition, according to the Handelsblatt, there are so-called bases and project offices in expensive city location. Even the headquarters, which according to the law should have their headquarters only in Berlin, have decentralized appendages in Essen, Frankfurt and Dresden.
At the beginning of the year, more than 7,000 employees were supposed to regulate the operation of the motorways, more than 4,000 planning and construction of the roads and 2,000 working at the headquarters. A question from the Green Group in the Bundestag to the BMVI showed that the vacancies in the headquarters and the construction teams in the branches are just over a third below the planned figures. With so much need, crooked machinations do not go unnoticed. As the “Süddeutsche Zeitung” (SZ) first reported four weeks ago, society is shaken by a “salary affair”. “When concluding non-collective employment contracts (…) and their submission to the Supervisory Board has led to irregularities,” scheuer’s State Secretary Enak Ferlemann acknowledged in a statement to the Bundestag. Since then, there has been suspicion that the management may have concluded over-funded employment contracts with executives behind the back of the supervisory board. These should go far beyond what the collective agreement negotiated specifically for the GmbH allows.
Billion-dollar gap in road construction?
The matter is also sensitive for Scheuer, since he had to be aware of the events at least since June, but did not inform Parliament. An internal investigation was already under way at the time. However, this was not enough for the Supervisory Board, which is why, according to Ferlemann’s letter, it had “commissioned an external auditor to clarify the facts” by a special meeting on 2 July 2020. In general, the Minister does not take his information duties very seriously. On 2 November, the “Handelsblatt” once again published the contents of the company’s “Financing and Realisation Plan” (FRP), of which the BMVI boss had to be aware since the end of August. According to this, the 300 road projects planned for the year 2025 will be short of funding of one-sixth of the estimated cost. While the FRP calculates at 30 billion euros, only 24.4 billion euros are priced in the federal budget. There would be “more investment beyond the annual resources available,” the paper, titled “Growing Together,”” says the paper. In concrete terms, an additional requirement of EUR 4.9 billion is mentioned in order to implement all planned “new and expanded, conservation measures and investments, for example in rest areas or noise protection”.
The fact that the internals once again ended up in the newspaper earlier than the housekeepers in the Bundestag should not be an accident. Scheuer does not intend to present the document to them until the end of November for the clean-up meeting. Until then, much time passes to give room to the outrage over the “worst” customer. There is likely to be some trouble, especially in the constituencies where possible projects could be on the rocks. In view of this, the Bundestag will probably not allow itself to be asked for too long until it hits the missing billions, especially since the money sits rather loose in Corona times.
Cost trap PPP
In the distant future, in retrospect, EUR 5 billion could turn out to be peanuts anyway. PPP projects now account for 60 percent of new construction activities in road construction. The eleven planned or already initiated programmes of the latest generation in the field of motorways (availability, short V-model) alone add up to 15 billion euros – as of 2015. The item is already likely to be much higher. PPPs are typically designed for two to three decades, during which the state re-rents back the lines built or renovated by investors and subsequently operated at inflated prices. Not only has the Federal Audit Office repeatedly complained about this and identified huge additional expenditures over conventional government procurement. The evidence is currently also provided by a look at the draft budget for 2021. In it, the federal government estimates 2.8 billion euros for the Fürth/Erlangen motorway junction on the A3, up from 2.1 billion euros in the current year. The motorway triangle Ohmtal on the A49 will also be more expensive: instead of 1.1 billion euros, it is now expected to cost 1.4 billion euros. With a term of 30 years, one does not want to calculate what else is going to work out.
A bottomless barrel also threatens to become the Autobahn-GmbH itself. According to Handelsblatt, the “efficiency gain” with which the political leaders had made the citizens palatable to the large-scale reform will be “at the earliest in five or six years”. Until then, things will simply be more expensive and more expensive, and politics will help out again and again. After all, the reconstruction in the Bundesrat had been put into being in an all-party coalition. Who among the participants wanted to drop the child that was born with them right at the first problem in the well? Proper demands such as those of the Green budget politician Sven-Christian Kindler, that PPPs should be “prohibited by law” and that the money should be better invested in the mobility revolution, should be enjoyed with caution. In Hesse, the Green Transport Minister Tarek Al-Wazir is in the process of implementing the environmentally and climate-politically insane expansion of the A49 on a federal mandate, a PPP project that he himself considers “nonsensical”, but not nonsensical enough to break the coalition with the CDU.
Left shooter aid
Oh yes: LINKE also holds a share in Autobahn-GmbH. In the state chamber at the time, all three states with left-wing government participation (Thuringia, Berlin, Brandenburg) voted without necessity, because they were irrelevant for the outcome, in favour of the reorganization, while the Bundestag group voted against it the day before. Two months earlier, Thuringia’s Prime Minister Bodo Ramelow had helped the “foreigner toll” to a temporary breakthrough. Due to his abstention in the Federal Council, Dobrindt’s bill did not have to be sent to the Conciliation Committee. As a thank you, the Minister promised a regional rail project. It is only good that at least Scheuer remains true to his principles. A month ago, he had to abandon his plans for an EU-wide car toll. The EU colleagues did not want to participate. Such a bad luck bird , but also – still carry on!