Almost one year ago, Alexander Dobrindt, the German federal transport minister, proudly announced the release of €2.7 billion, or $3 billion, for road building and renovation projects. The money, he said, would go to 72 fully-planned projects.
“All projects can be immediately implemented,” he said, presenting the list.
Among other things, that investment drive was an answer to international criticism that Germany should spend more to stimulate economic growth, both at home and across the European Union. So the federal government was delighted to announce new road-building, massive broadband expansion, new kindergartens, and the building of apartments for refugees. New power lines across the country would also underpin the country’s transition to renewable energy.
Previously, resources had been lacking for these kinds of projects. Part of the solution was creating public-private funding initiatives. But now that the money is there, Germany has another problem: It lacks planners to implement its ambitious investment plans.
“We are drowning in money.”
Not even half of the projects announced in 2015 have begun. Worse still: a new Handelsblatt survey of Germany’s state governments shows that there are even fewer funding-ready projects in the pipeline.
Last year Mr. Dobrindt poured €2.7 billion into 72 projects. This year €2.1 billion will be spent on just 45 projects. More than half of the money will go to the southern German state of Bavaria, where €1.1 billion will be spent. But of 28 projects planned, the state only has 4 immediately ready to build.
“If there is a list, it will unfortunately be a short one,” Enak Ferlemann, German state secretary for transport, told Handelsblatt.
Things look similar in northern Germany too. “Last year, we had a drawer full of unrealized projects,” said Christian Pegel, transport minister for the northern state of Mecklenburg-Western Pomerania. “But we emptied that out in 2015.”
This year, the state has announced just a single bypass. The city-states of Berlin, Bremen and Hamburg, as well as the states of Saarland and Schleswig-Holstein have announced no new projects. The same goes for North-Rhine-Westphalia, the most populous state in north-western Germany.
Other large states do not have many more. Bavaria and Baden-Württemburg in the south are well represented this year because they stockpiled projects in previous years, hoping to take advantage of end-of-year budget surpluses. Baden-Württemburg saw six projects funded this year, worth a total of €270 million.
States, local governments and private companies are all short of engineers and planners. In terms of human resources, large-scale engineering suffers from cyclical problems. Since investment tends to see substantial fluctuations, rising and falling over time, there is sometimes an over-supply of construction engineers, and a shortage at other times.
Applications surge when times are good, but by the time a new generation graduates, often the boom is over. Moreover, construction engineers tend to be poorly paid in comparison with other specialties. For some time now, industry groups have been warning of a skills shortage. Many engineers are retiring while the number of new graduates is falling.
The problem will really only hit home in the coming years, according to industry sources.
“There are hardly any construction engineers on the market,” said Heiko Stiepelmann, head of the Federation of the German Construction Industry. The federation is pushing to have the planning of road-building projects transferred to private industry, at least in the construction phase. But it is not clear if that will help.
“We are drowning in money,” said Bettina Hagedorn, the chair of Germany’s parliamentary audit committee, from the center-left Social Democrats.
It isn’t just state road-building departments suffering from a lack of skilled planning professionals either, she said. Deutsche Bahn, the state-owned railway company, as well as the shipping authorities, all have unused financial resources, due to a lack of engineers. In 2015, their unspent engineering budgets came to more than €1 billion.
“There are hardly any construction engineers on the market.”
Opponents of a central highway authority in Germany are using this situation to defend their position. “A central road-building authority is not a panacea which would guarantee faster planning and building,” said Hans-Hartwig Löwenstein, president of the Central Association of German Construction Companies.
As well as a lack of engineers, regulations were a problem, he said: “European environmental and nature-protection regulations mean projects are complicated and can take a long time.”
In fact, there are still projects in Germany,but these are either enmeshed in lawuits, or which will be financed, built and run by private enterprise. Given the healthy state of public finances, however, public-private initiatives are something exceptional. Minister Dobrindt supports them, but wants to establish a firm legal framework: a public commission has been established to examine planning procedures and regulation.
These days, European Union rules are interpreted more and more strictly by the German courts: it is nearly impossible to be sure planning processes will meet with legal approval, apart from issues with qualified personnel. In some cases, the government should intervene to reduce cases to a reasonable level, said one commission member. This has happened in the past.
The renovation of thousands of bridges across the country serves as an example. A full-scale planning approval process is needed if a bridge has to be demolished and rebuilt, a process that can take from 4 to 6 years.
But Minister Dobrindt recently stepped in to cut back on legal actions. In a small step forward, he stipulated that lawsuits will be shortened by being sent directly to the Federal Administrative Court in Leipzig. A small step forward.