The opening balance of the Federal Road Administration Company, which has been operating since the beginning of the year, is a single debacle. Construction sites stand still, invoices are not paid and the organisational structure devours hundreds of millions of euros. Only consultants and top officials are happy, who tingle with three company cars between dozens of bases of the bureaucracy monster. The opponents of the reform have seen the misery coming, from which those responsible in the Ministry of Transport valiantly close their eyes. “Thank God” everything was going well, according to State Secretary Güntner. From the point of view of the privatization lobby, he could be right.
100 Days “Autobahn GmbH des Bundes”. If that’s not a reason to celebrate. Thought was also given to the Zentralverband des Deutschen Baugewerbes (ZDB) and invited on Wednesday to the online palaver with participants from administration, politics and industry. The rendezvous in front of the mat screen was as crowded as the message was foreseeable: Apart from a few gentle birth pangs – everything is going well! Michael Güntner, State Secretary at the Federal Ministry of Transport and Digital Infrastructure (BMVI), provided the language arrangement on behalf of the Federal Government. “The most important thing first: the start to the 1. January 2021 has succeeded.“In the run-up to this, there had been great fears: “Chaos on the road, the IT will not work, the salaries will not be paid, the motorways will not be operated by the employees, there will be no tenders.“All this did not happen, said the CDU man,“and I say thank God”.
The inclined observer may say something else, such as: what drugs does the Lord take? Güntner just became aware of how he made the pandemic forgotten for a few hours before Easter in his own office with his entourage with wine and fine food without minimum distance and masks, without forgetting to photograph the small debauchery for posterity. But does residual alcohol still have its effect weeks later? Hardly and the consumption of other hallucinogens one does not want to repeat Güntner. Maybe he just doesn’t read a newspaper. For example, the day before yesterday, just on the day of the small anniversary, wrote the “Handelsblatt”, several building contractors were about to stop their work on roads and bridges, because their invoices have not been paid for weeks. Whereby one also learns from the article that the BMVI itself has confirmed to the transport Committee a payment delay in the amount of 600 million euros.
1.2 Billion Euros Late payment?
Shouldn’t a secretary of State be in the picture about this? Especially since the “Handelsblatt” had already reported a month ago about a mountain of outsiders (behind payment barrier). Accordingly, more than 20,000 outstanding claims totaling 650 million euros had been stacked on the desk of the newly created federal company. It is even rumored to be in the region of 1.2 billion euros, which is why” soon no construction vehicle could drive on the 13,000 kilometers of motorways”. The reason for the delays are problems with the IT infrastructure as a result of the unification of the previously country-owned systems under the umbrella of the new central administration. This brings with it a few more victims: it is unclear whether the due surcharges for the 7,000 employees in the road service can be transferred on time. Although there is no lack of money for it. Autobahn GmbH alone wants to spend 100 million euros to upgrade the technology. At least a little light shimmers at the end of the tunnel. According to the Management’s” action plan”, a" stabilisation of processes " is expected by the end of the second quarter.
Otherwise, it takes a lot of patience until the shop is running properly. Four years have already passed since the federal government and the länder decided to shift their competences in the construction of trunk roads from the länder to a central company under federal jurisdiction, with just under three years after the foundation of the GmbH in late summer 2018. Anyone who had believed that, according to Andreas Scheuer (CSU), the “biggest reform in the history of motorways” could be wuppered in the blink of an eye should not have believed the Federal Minister of Transport and his predecessor and party friend Alexander Dobrindt (CSU). For example, with a much smaller transport network and administrative apparatus, the Austrians have only managed a similar reform in nine years.
But because the Germans like to bake big rolls, they first have to live with half things, or with double structures, which cost many times as much. As a reminder: the makers of the mammoth reform decided in an all-party coalition have promised more efficiency, speed and lower expenditure in road construction as soon as the federal government has taken over the scepter from the 16 federal states. If they had been responsible for the planning, construction and operation of the trunk roads for decades, a central federal authority under private law should now do this from a single source. Such was the plan. Out of plan and on the plan stepped with the Autobahn GmbH for the time being but only one authority more, which would have been thrown up without the co-work of the countries.
First of all, this applies to the “Deutsche Einheit Fernstraßenplanungs - und-bau GmbH” (Deges). The company, which is majority state-owned, has so far implemented major transport projects for twelve federal states and was supposed to be merged with the Federal Limited Company by the end of 2020. However, due to constitutional and public procurement concerns, the Bundesrechnungshof (BRH) advised against this, which is why the project was initially put on hold. In order to maintain cooperation, the federal government and the länder concluded so-called cooperation agreements (KOV). On this basis, the federal government buys benefits from the federal states for an indefinite period at enormous sums, which it actually wanted to accomplish on its own since the beginning of the year.
In law-free space
The federal company had entrusted numerous tasks to the länder by freehand, “although it would have had to tender them out”. Nor is it permitted for the federal government to be involved in two companies active in highway construction, i.e. Autobahn-GmbH and Deges, in which it holds a third of the shares. Furthermore, the BRH denounces the access of the new company to the administration of various federal roads, although the sections in question were not transferred to the federal government by law.
This means that business relations are in fact in a legal vacuum, which is why the auditors are calling for the dissolution of the KOV “by 31 December 2021 at the latest”. Likewise, the “mixed administration” at the Deges should be abolished in order to end the " unlawful state as soon as possible. Under no circumstances would it be acceptable to let the deadline end only with the completion of all country projects in 2028.“These are tough announcements, but they only depict a narrow section of the BRH lock. For Sven-Christian Kindler, speaker of the parliamentary group of Bündnis 90/Die Grünen, the report provides “Material for a crime thriller”. Cases of constitutional violation are “no trifles, “he said,“in any halfway decent government, a minister with such a record and such massive violations of law would have been dismissed long ago.” Even with Carl Waßmuth from the association Gemeingut in Bürgerinenhand (GiB), the BMVI boss does not fare well. “Like others, I consider Mr Scheuer to be one of the most incompetent transport ministers in the history of Germany.”
The scolded has a thick coat, as thick as the purse, from which all his bankruptcies are to be paid. It has long since become apparent that the damage he is doing with the reform of the highway administration will far outshine that of the botched “foreigner toll”. According to the budget of the Federal Ministry of Transport and Digital Infrastructure (BMVI) from December of the previous year, the construction of the Autobahn-GmbH alone has so far devoured almost eight times more money than planned – 325 million euros instead of 41 million euros. Only for the current year alone, the unscheduled expenditures are to increase by 400 million euros.
The organization structure devours plenty of money. The Berlin headquarters in an expensive location is solely responsible for three branches in Essen, Frankfurt and Dresden as well as dozens of branch offices, bases and project offices at country level. The staff also earns more than usual. Because there was concern to attract enough staff, a collective agreement with conditions ten percent above the requirements of the Collective agreement for the Public Service (TVöD) was negotiated specifically for the employees. This, too, displeases the Federal Court of Auditors, as it “sets in motion a spiral that disrupts the tariff structure in the public service in the long term”. In the most beautiful populist manner, Scheuer does not want to be reproached for paying his people well, but is silent about the background of his magnanimity. As GiB spokesman Waßmuth recalled, the service trade union ver.di was initially one of the strongest opponents of the reform, but collapsed a few days before the decision. “Now you realize where the sudden change of heart came from.”
Three company cars per boss
Half a year ago thousands of employees were still missing and today we are still far from closing the gap. To all the annoyance, there is a suspicion in the room that the Executive Board might have concluded overly endowed employment contracts with executives behind the back of the Supervisory Board. These should once again go far beyond what the well-endowed house tariff agreement allows. In addition, according to “Handelsblatt”, higher officials benefit from a"lavish company car regulation”. For example, the head of department and the managing director are expected to approve two Mercedes E-classes and an Audi e-tron with the driver. “Otherwise, only ministers or secretaries of state have such a thing,” the paper Insider says. Even division and staff managers configured trolleys up to 96,000 euros, as did the heads of the branches.
As usual, however, the consulting industry is the biggest source of friction. Originally, the expenses for external subcontractors were to amount to 24 million euros. By 2019, the item grew fourfold, namely 99 million euros. Scheuer had neither the need of the expertise nor its profitability determined, complains the BRH, with which the head of department once again violated budgetary and procurement law. Apparently, the BMVI “lacks a daily up-to-date overview of the consulting services requested, both at Autobahn-GmbH and in-house”.
With all this, the long-term consequences for drivers and taxpayers are not yet foreseeable. “This GmbH construction felt is already a huge scandal in itself, but the very large plundering is still ahead of us”, warned GiB Board Member Wassmuth. “This authority becomes an almost self-running concrete runway machine, which outsources its tasks and activities on a large scale to private individuals at the expense of the environment and at gigantic costs.“Gemeingut in BürgerInnenhand was at that time the largest asset in the resistance against a quasi-privatization of highway construction, as it was implemented in the form of the Autobahn-GmbH.
Its spiritual creator was the so-called Fratzscher Commission, a circle of market-liberal economists and representatives of the financial sector appointed by former Economy Minister Sigmar Gabriel (SPD) and chaired by the head of the German Institute for Economic Research, Marcel Fratzscher. In 2014, the bank was entrusted with the task of identifying highly profitable investment opportunities for banks and insurance companies hit by low interest rates “to strengthen investments in Germany”. This led to the plan to open up highway construction to private profit interests even more than before.* The lobbyists were unable to enforce their maximum wishes to transfer the new federal company or its subsidiaries to investors by means of direct investments. Under pressure from the public, the grand coalition introduced various “privatisation brakes” into the legislation, which at least prevented a “Autobahn-AG” according to French or Italian models.
However, this does not detract from the sale of Germany’s asphalt and concrete slopes. Rather, the transfer of the previously sovereign tasks to a federal company under private law amounts to a so-called functional privatisation. In the run-up to the resolution in the Bundestag and Bundesrat, for example, the constitutional lawyer Christoph Degenhart stated in 2017: “This is a formal or legal form privatization, which could, however, have effects on the project level of a material partial privatization.“The decisive lever here is public-private partnerships (PPP), with which the planning and construction of trunk roads are outsourced and their operation is handled by private investors for decades. This has already been a way practised with an increasing tendency as soon as the federal states built or renovated motorways on behalf of the federal government. However, under the umbrella of a politically largely uncontrolled central authority in private law, which is itself mistress of the entire motorway network, such transactions threaten to become the standard model.
Soon tolls for all?
The courts of auditors in the federal and state governments have repeatedly complained that the long-term costs of such enterprises almost invariably exceed those of a classical government procurement measure. The Federal budget for 2021 provides an interim calculation of the publicly funded mismanagement: at 19.1 billion euros, PPP for federal highway construction is priced in 1.6 billion euros more than was planned for the previous year. In addition, the planning of the Autobahn GmbH is completely out of control. Its medium-term financial and implementation concept estimates that the costs due for its 300 construction projects projected by 2025 will be 4.9 billion euros more expensive than previously known. Instead of 24.4 billion euros, the “fun” is to be booked with almost 30 billion euros, whereby this is only a snapshot.
Meanwhile, a brake block in the big enrichment monopoly is the temporary failure of the"foreigners ' toll”. This was actually intended as a prelude to a toll for all, as can be read in secret reports ordered at that time by the Federal Transport Ministry. For example, a strategy paper by the law firm Graf von Westfalen stated: “In the long term, the financing of the federal motorways should be ensured and settled completely outside the federal budget on the basis of financing amounts provided directly by the user.“You can be sure: the next attempt will definitely come.
Madness with method
The processes at Autobahn-GmbH were “typical” for such huge privatizations, Waßmuth said. “This is not madness, but has method and regularly leads to the emergence of non-transparent bureaucratic monsters that are neither controlled nor controlled in public.“Currently, this has to be done by Jan-Gerd Kröger from the company Kröger-Bau, for example. He has announced that due to unpaid bills, the maintenance and repair of the 2,500 bridges on the federal roads in the federal state of Bremen will cease at the beginning of next week. In the past, you could set the clock after when the federal treasury paid the bills. “Nothing works today.“With regard to the administrative reform, he speaks of “organizational failure”, the work of the CSU-led ministry is “neither Christian nor social” and for the companies concerned “a medium catastrophe”.
In a report by the Federal Ministry for Economic Affairs and Energy, this reads differently: it talks about a” smooth transfer of personnel from the länder to the federal government”,“the processing processes are established and run efficiently”. The conclusion of State Secretary Güntner on Wednesday also seemed to come from another world. That everything was going so well “was not a coincidence or luck, but the result of hard work”. Well then, cheers …