Infrastructure Projects

Germany's Unfinished Business

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The Berlin Palace, the Stuttgart Train Station, the Elbe Philharmonic in Hamburg, the Berlin-Brandenburg International Airport -- all big-name projects unfinished, over-budget and delayed.
  • Why it matters

    Why it matters

    Germany is criticized for spending too little on its infrastructure, creating a hurdle to economic growth. Cost overruns limit the budget even further.

  • Facts

    Facts

    • A new study looks at 170 infrastructure projects carried about between 1960 and 2014.
    • Germany spent a total of €200 billion on infrastructure during that time, €59 billion of which were cost overruns.
    • The infamous airport Berlin-Brandenburg, BER, is currently 116 percent over budget, the Elbe Philharmonic Hall almost 150 percent.
  • Audio

    Audio

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Germany is a country that tends to splash out big on publicly funded building projects – over the past four decades, it has spent an estimated €200 billion, or $226 billion, building new airports, installing wind turbines and solar energy farms and digitizing many functions of the federal government.

But 30 percent of that tab, about €59 billion, was spent on cost overruns, most of which could have been avoided if planners, contractors and supervisors had done their jobs properly, according to a new study by Genia Kostka, professor of governance of energy and infrastructure at the Hertie School of Governance, a business school located in Berlin.

Ms. Kostka and her researchers looked into 170 infrastructure projects in Germany financed at least in part by taxpayers between 1960 and 2014. Almost a third of these projects are still underway.

On average, they found that completed projects had exceeded their original budgets by 73 percent, and “the cost of the projects which are still unfinished is likely to go up before completion,” she said.

The Elbe Philharmonic Hall, a dramatic musical venue being built on a peninsula jutting into the Elbe River in Hamburg, easily beats this baseline.

The concert hall under construction in the historic northern German port is almost 150 percent over budget. The euphoria over the prestigious showpiece quickly faded when the price rose from an originally projected €352 million to currently €865 million.

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