Highway Reorganization

New Company to Steer Autobahn

Autobahn imago
Reorganizing the autobahn in Germany is taking shape.
  • Why it matters

    Why it matters

    Reorganizing Germany’s autobahn system is a critical part of the country’s wider reform of state and federal government finances sought by Finance Minister Wolfgang Schäuble.

  • Facts

    Facts

    • The federal government is exploring the creation of a limited liability company to “plan, build, operate, maintain and finance” the autobahn.
    • Currently, the federal government overwhelmingly funds the autobahn, while German states are responsible for most of the work.
    • Creation of a new federal highway operator could require consent from German states and a constitutional amendment.
  • Audio

    Audio

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After months of getting nowhere on creating a new company to finance, maintain and operate Germany’s autobahn network, the federal government has shifted the reorganization of its highway system into high gear.

Finance Minister Wolfgang Schäuble and Transport Minister Alexander Dobrindt, both center-right policymakers, and Economic Minister Sigmar Gabriel, a center-left Social Democrat, have agreed on the key responsibilities of a new autobahn organization they have been discussing for months.

In a seven-page paper obtained by Handelsblatt, Enak Ferlemann, a deputy minister in the transport ministry, describes how the organization will operate the nation’s federal highways in future.

Until now, there has been much confusion over which responsibilities belong to the federal government and which belong to Germany’s 16 states. The key to resolving that confusion, according to the paper, is to create “a federal infrastructure company with a focus on federal highways.”

To that end, the government is considering creating a limited liability company that would “plan, build, operate, maintain and finance” its autobahn infrastructure, according to the paper. The company would include a mix of public and private money.

The government is considering creating a limited liability company to “plan, build, operate, maintain and finance” its autobahn infrastructure.

Mr. Schäuble views a reorganization of the highway system as a critical part of Germany’s wider reform of state and federal government finances.

But the plan could set the stage for a showdown between the federal government and the German states, which so far have not been impressed with Berlin’s much-belabored proposal.

Today, the federal government overwhelmingly funds the autobahn, while German states are responsible for the implementation, including building and operating the highways. But that organizational structure led to the “wrong incentives,” Mr. Ferlemann wrote.

Under the planned scheme, the new infrastructure company would receive toll revenues for those roads in its jurisdiction and be able to raise additional capital if necessary, according to Mr. Ferlemann.

To attract private capital, investors would also be able to participate in projects – an important demand of Mr. Schäuble.

The finance minister is looking increasingly to private investors to relieve the federal budget. But the government is also cautious of creating a “shadow budget,” which could restrict private investors from participating in the legal structure of the organization, according to the paper.

Mr. Gabriel hopes the new infrastructure company can generate investment opportunities for insurers and pension funds. Mr. Dobrindt expects the new company will be able to improve operational efficiency through its centralized control.

Having agreed on the key tenants of the new autobahn company, the ministers must now gain the support of state leaders. And since their plans would require a change in the German constitution, they also need to convince the upper house of the German parliament, the Bundesrat, which represents the states.

Winning over the states will be no easy task, considering that Bavaria’s state premier, Horst Seehofer, has already said the new autobahn organization “is never going to happen.”

The federal government has some leverage, however. The ongoing reform of state and federal finances foresees the federal government boosting its share by €9.6 billion, or $10.5 billion.

In return for that additional funding, the states may need to give up something, which one state premier suspected could be the launch of a new autobahn organization with sweeping responsibilities.

 

Daniel Delhaes and Jan Hildebrand are editors at Handelsblatt. To contact the authors: delhaes@handelsblatt.com and hildebrand@handelsblatt.com

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