When will the power supplies be privatized?

Infrastructure

Tim Engartner

To person

is professor for didactics of the social sciences at the Goethe University Frankfurt am Main. Most recently he published "Staat im Ausverkauf. Privatization in Deutschland" (2016). [email protected]

It burned almost every day in ancient Rome because hearth fires that got out of hand easily set the cheap tenements on fire. [1] Against this background, Marcus Licinius Crassus founded in 70 BC A private fire brigade. When there was a fire, Crassus would appear on the scene and make an offer to the owner of the burning building: if he was ready to sell his house for a fraction of the fair price, the fire brigade would go into action. If the owner did not want to sell his house, Crassus whistled his fire service slaves back and let the fire run its course. This "business model" made him one of the richest Romans of his time.

This example, which goes back a long way, illustrates that there are valid reasons that speak against the private performance of sovereign tasks. However, one does not need to look back two millennia to recognize that private economic activity can dramatically fail in key areas of public services of general interest. Numerous examples from the recent past also show the devastating consequences that the privatization of (transport) infrastructures can have.

In the first decade after privatization alone, train drivers in the motherland of the railways had to accept a total of more than 11,000 years of delay after British Prime Minister John Major privatized the once proud state-owned company British Rail in 1994. [2] The break-up of British Rail into 106 private individual companies not only gave rise to more than 2,000 subcontractors, but also after a short time clearly demonstrated the risks to life and limb associated with a fragmentation of the rail system: The Southall Accidents (1997), Paddington (1999) and Hatfield (2000), which together left 42 dead and more than 540 seriously injured, have burned themselves into the collective memory of the once proud railroad driver's nation. The change of Railtrack on the way from going public to begging has led to the fact that now even the conservative middle classes advocate the re-nationalization of the entire railway system.

From traffic planning to the traffic market

Although the term "traffic planning" has long been regarded as an unbreakable guiding principle in transport policy, the "denationalization of the state" in the country of motorists has also been observed for some time in the road infrastructure. While at the end of 2016 even reputable leading media announced that the privatization of federal highways was off the table, it has in fact begun long ago. Article 90 of the Basic Law (GG), according to which the federal government is the owner of the federal motorways, is to remain unaffected. However, the private transport infrastructure company agreed by the federal and state governments is not off the table - and thus also the awarding of concessions for federal highways based on the model of public-private partnerships (PPP) as the form of privatization favored by the CDU / CSU, FDP and SPD. [3] Several pilot projects have already been completed in accordance with this model: Augsburg West – Munich Allach (A8), state border Hessen / Thuringia – Junction Gotha (A4), Malsch – Offenburg (A5) and Bremer Kreuz – Buchholz (A1), the "Fixed Warnowquerung "in Rostock and the" Travequerung "in Lübeck. A dozen other projects are under construction or in the planning stage, such as the motorway sections Havelland – Dreieck Pankow (A10), Havelland – Neuruppin (A24) and Bordesholm – Hamburg / Northwest (A7). The investment volumes of these three projects alone amount to more than 14 billion euros.

The efficiency advantages that the privatization lobby regularly promises are usually not realized through PPP. As early as 2014, the Federal Audit Office came to the conclusion that the federal highways that were built and operated as a PPP project were 1.9 billion euros more expensive than conventional, i.e. purely state-built projects. This is primarily due to the fact that the federal government can take out the loans required for the expansion and new construction of the motorway much more cheaply than private companies due to its higher creditworthiness. With the federal trunk road company, as the federal government now wants to implement in the form of a "capital collection point for trunk roads", PPPs would finally be institutionalized - to the detriment of the general public and to the benefit of the finance and insurance industry. Ultimately, the "Fratzscher Commission" set up by the then Federal Economics Minister and current Foreign Minister Sigmar Gabriel (SPD) has opened up another opportunity to shift the costs of the financial and euro crisis from investors to consumers and taxpayers in times of historically low interest rates.

While the contracts for law firms, construction and consulting firms are extremely lucrative, they are usually disadvantageous for the public sector. For politicians, PPPs are attractive because the loans in the case of direct (full) financing by the public sector are to be booked directly as debts, whereas the payments in the case of privatization à la PPP are incurred over a period of several decades, thus additional national debt do not have to be booked (in their entirety). The "debt brake" that has been in force at federal level since 2016 and at state level from 2020 onwards can be circumvented, but the mountain of debt will not be removed.

Criticism of privatization in the field of road transport infrastructure is increasingly coming from traditionally conservative circles. Since both the federal states and the municipalities have made massive savings in the building management, there is a lack of "builder competence" and money, so that only "a few large corporations" have the say in PPP projects, criticizes Holger, the Secretary General of the Central Association of German Crafts Schwannecke. The fundamental nature of his criticism is noteworthy: "At the moment, very high returns are guaranteed in PPPs, which subcontractors and their employees, but also taxpayers and road users, have to finance - in addition to the actual construction and maintenance costs. This fatal development must be stopped. The creative power the contracting authority may not be further reduced. "[4]

It is astonishing that the 12,949 kilometer German motorway network is now to be transferred to private hands on a large scale: in the worst case, we are threatened - to put it bluntly - at road tolls like in the Middle Ages. At the same time, the Federal Republic of Germany is still waiting for the compensation payments for the 16 months late commissioning of the truck toll system "Toll Collect", which was founded in 2002 as a PPP by an operator consortium made up of Deutsche Telekom, Daimler Chrysler and Cofiroute and which is referred to as "Piece from the Tollhaus" must become. The process before the private arbitration tribunal has cost taxpayers a three-digit million sum - and an agreement has still not been reached. An out-of-court agreement failed due to the resistance of the former Federal Transport Minister Peter Ramsauer (CSU), who insisted on a judicial decision because otherwise the federal government could lose billions of euros.

For two decades now, privatization efforts have been aimed at service facilities such as petrol stations, rest stops and hotels located along the national motorway network. In 1998 the federally owned company Autobahn Tank & Rast GmbH was sold to a private consortium of Allianz Capital Partners GmbH, Deutsche Lufthansa Service Holding AG and Apax Beteiligungs GmbH. With this privatization, the red-green federal government pursued not only the "transport policy (...) strengthening of the 'drive-refuel-rest' system on the autobahn" and the generation of one-off income also the maintenance of the "medium-sized structures in the field of tenants / Operator ". [5] In 2004 the consortium then sold Tank & Rast for just under 1.2 billion euros to the British private equity company Terra Firma Capital Partners. This is said to have paid out a generous special dividend in 2006, which is likely to have contributed significantly to Tank & Rast's debt burden. A year later, half of Tank & Rast was passed on to an infrastructure fund of Deutsche Bank called RREEF.

Since 2015, the motorway filling stations and rest stops in this country have been in the hands of a consortium which, in addition to the insurance group Allianz, includes the sovereign wealth fund of Abu Dhabi and the Canadian infrastructure investor Borealis. The "Reibach an der Raststätte" [6] finds its expression not only in the horrific gasoline and catering prices, but also in the fact that the fee for the much discussed Sanifair "toilet voucher" was recently increased from 50 to 70 cents, although it continues to only increase Redeem 50 cents at the cash register. Thus, when the travelers go to the toilet, they pay the dividends for the shareholders of the private investors.