Snails, worms, concert halls and airports – Germany’s endless waste

Published in Business Spectator (Melbourne), 17 April 2014

If there was a ranking for the most self-righteous nation in Europe, Germany would have a good chance of topping the list. Sure, without Germany’s support the euro may have already gone under, but the Germans are extremely good at coupling such help to their neighbours with unrequited advice on how to run their countries.

As if Germany was some kind of role model that all the rest of the world should follow!

Looking at Germany’s recent track-record of managing large government projects, one can only hope that no country will ever copy Germany’s mistakes. If you thought that Germany was a beacon of perfectionism, efficiency and punctuality, think again. The Germans’ inability to deliver projects on budget and on time now makes some banana republics look good.

It has become a sad tradition that every year, the German Association of Taxpayers publishes its ‘Black Book of Wasted Taxes’. Last year’s edition was already the 41st and it follows a tried and tested recipe by presenting a collection of 100 examples of public mismanagement.

Some cases are rather quaint such as the relocation of a small colony of 60 ramshorn snails. The molluscs were found in an area where a new eco-business park was meant to be built. But since the tiny snails are a critically endangered species, they had to be to be moved to a new place – at a cost of €300,000, which equalled €5,000 per snail.

Not snails but worms plagued a ministry in the north-eastern state of Mecklenburg-Vorpommern. A computer worm had infected 100 computers. It would have been easy to remove it with freely available antivirus software. Instead, the ministry decided to dispose of the fully functional computers and ordered new ones. Cost to taxpayers: €146,000.

Unfortunately, not all examples of waste are such scurrilous, small-fry affairs. As a general rule, the bigger the government project, the more money German governments throw out of the window. The two most notorious cases are Hamburg’s new concert hall and Berlin’s international airport. They also show which factors are responsible for constant cost-overruns.

Hamburg’s nightmare with its new Elbphilharmonie (name after the river Elbe) began with a dream of a most spectacular culture centre. In 2003, plans by Swiss star architects Jacques Herzog and Pierre de Meuron were presented. They combined traditionalist brickwork foundation with a futurist glass construction – a concept which enchanted the then lord mayor Ole von Beust, who immediately started campaigning for the idea.

Despite its revolutionary architecture, the original price tag was meant be a measly €77 million – far less than comparable concert halls have cost to build elsewhere. By the time the city entered into a contract in 2007 to build the hall, the project had already risen to €114 million. It was meant to be opened in 2010, but that date turned out to be too optimistic as indeed was the whole cost calculation.

The latest official estimate for the concert hall will see it opened sometime in 2017, by which date it will have cost Hamburg taxpayers €789 million – a cost overrun of more than 1,000 per cent since the first proposals.

How could this happen? That was the question a parliamentary inquiry sought to answer. In its final report, it mainly blames ex-mayor von Beust. Blinded by the wish to build a prestigious landmark, costs were systematically downplayed while elementary planning mistakes were made. The basic problem was that the project was modified throughout to reflect the ever-changing wishes of its political masters. They suddenly wanted to include an extra concert hall, a tailor-made escalator and new curved window panes. In total, the plans were changed more than a thousand times since the start of the project.

Now you might think that it would be hard to find a project that is worse than Hamburg’s extravagant concert hall. If only that were true. Berlin’s new international airport is another example that makes you question Germany’s alleged efficiency.

After Germany’s unification, and with the move of the seat of government from Bonn to Berlin, it was decided that the capital deserved a new big airport. Of course it had not fewer than three international airports at the time (Tegel, Tempelhof, Schönefeld) but they were not deemed to be sufficient anymore to deal with the expected growth in traffic.

The two federal states of Berlin and Brandenburg together with the federal government decided to build a new airport adjacent to the old Schönefeld airport. Planning approval was granted in 2004, and back then costs were estimated to be a relatively modest €1.7 billion. What happened then was a similar story to Hamburg’s concert hall, just on a different scale. Planning was incomplete; political oversight was shambolic; and project management amateurish. The project got held up time and again by all sorts of technical issues which had not been foreseen, from difficulties with fire prevention systems to problems with wrongly installed cables.

At the moment, nobody can say with any certainty when the new airport will be opened. It should have happened in 2011, but now it could take until 2017 for the airport to be fully operational. It might start a test run next year. Only one thing is certain. The costs have increased to more than €5 billion already, and could well reach €7 or even €8 billion in the end. One can only hope that it will eventually work at all.

Whether the airport will be a good investment is a different question altogether. Given that Germany’s national carrier Lufthansa operates from its two hubs in Frankfurt and Munich, and competitor Air Berlin is struggling, it will not be easy to turn Berlin’s new airport into a success story.

For a country that likes to present itself as a model to the world and that loves to be praised and admired for its alleged efficiency, the carelessness with which it wastes taxes is plainly astonishing. Germany’s saving grace is a private sector with highly productive and competitive firms. But maybe that’s the main difference between itself and Greece?

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