Public-private partnerships deals under Merkel have become big issue as parties debate how best to renew infrastructure

Germany’s autobahn has for decades served as a monument to the country’s proud history of planning and engineering, its “grey track, white stripes, green edge” memorialised in song by Kraftwerk and dotted with roadside churches where Catholics and Protestants can pray to the hum of freewheeling traffic.

But on the eve of Germany’s federal elections the motorway has become a stage where the country’s reputation for efficiency and fiscal prudence is being severely tested.

Large sections of the network have for years been in need of a facelift. Parts of Europe’s longest motorway, the A7, were built with concrete slabs that have over time become brittle and now make for a bumpy ride.

A refurbishment of the road between Salzgitter and Göttingen, in Lower Saxony, was first recommended by federal court of auditors in 2012, which said the government needed to act with the utmost urgency to avert major accidents. But the government dithered. Instead of paying for the works out of state coffers, the transport ministry wanted to finance the project via a public-private partnership (PPP), whereby a private company would maintain the motorway for 30 years and would be allowed to collect a truck toll.

Championed by Merkel’s CDU, the Bavarian CSU and the pro-business FDP, but opposed by the Greens, the Left party and the rightwing Alternative für Deutschland, PPPs have increasingly become an issue in the election campaign as the parties debate how best to renew the country’s infrastructure.

Their key attraction is that they look like a way for the state to make an investment while the private sector carries the risks that come with it – even more attractive since a balanced-budget amendment known as the Schuldenbremse (“debt brake”), introduced in 2009 by the finance minister, Wolfgang Schäuble, severely limits the deficits that states can rack up.

When the refurbishment of the A7 was finally contracted out to a conglomerate called Via Niedersachsen this February, however, the deal looked like less of a win-win: projected costs had doubled to more than €1bn (£886m) and the extent of the refurbishment had shrunk.

And far from reducing state risk-taking, the PPP venture looks like an invitation for business to cherrypick profitable building projects and leave public bodies to fix the problems it has created along the way.

A 7.5-mile section of the A7 between Bockenem and Salzgitter has been siphoned off from the deal: a group of contractors who renovated it in 2014 accidentally recycled toxic tar sands, which will cost millions to extract. One of the companies involved, Eurovia, is now part of the new Via Niedersachsen conglomerate.

“It’s like a planned economy for private business,” said Helmut Haderer, of the road maintenance workers’ union, zooming down the A7 in the passenger seat of a black Audi. “Our grandfathers and grandmothers built the autobahn. And here we are, selling it off like some second-hand car.”

Facebook Twitter Pinterest Protest against public-private partnerships outside the German finance ministry in Berlin on 19 September 2017. Photograph: Philip Oltermann/The Guardian

The building site on the Autobahn 7 has become a blueprint for the way in which the German state plans to carry out future infrastructure projects.

On 1 June this year, Germany’s outgoing government waved through a number of changes to the constitution to put a centralised, state-owned company in charge of building and maintaining new infrastructure projects via PPP cooperations.

Its advocates in the CDU claim the new body will at last speed up the repair of Germany’s crumbling infrastructure, while the CDU’s junior coalition partner, the centre-left SPD, insists the new body is equipped with enough safeguards to prevent a full-scale privatisation of the autobahn.

But critics say the move will place Germany’s motorways beyond the reach of democratic oversight and make them prone to creeping fragmentation as the most lucrative chunks of the network get outsourced to opaque conglomerates under pressure to maximise profits.

“In the 90s, union representatives in Britain used to tell us horror stories of havoc wrought by the privatisation of the railways,” said Carl Wassmuth, of the Gemeingut in BürgerInnenhand (Common Property in Citizens’ Hands). “But now the autobahn is heading in a similarly chaotic direction.”

Quick guide How does the German election system work? Show Hide The first vote Germany’s recently amended electoral system, combining direct and proportional representation, is fiendishly complicated. Its 61.5 million voters get two votes on a single ballot paper: the first for a local representative, the second for a party. Roughly half the Bundestag’s seats are guaranteed to go to the 299 representatives of the country’s electoral districts, each chosen by their constituents with their Erststimme, or first vote, in a straight first-past-the-post contest. The second vote The rest are allocated according to the national vote share won by every party that clears a 5% threshold in the second vote, or Zweitstimme – which is also used to determine the overall number of seats each party winds up with: if a party scores 25% of the national vote, it must get 25% of the seats. Sometimes parties return more Erststimme representatives than they are entitled to, according to the Zweitstimme. So to compensate, the other parties get extra seats – which means the Bundestag, theoretically made up of 598 representatives, could expand to as many as 800 (it currently has 631). Who elects the chancellor? Once a governing coalition has been formed, which can take up to a month, Germany’s president (a largely ceremonial role) nominates the chancellor – usually the leader of the largest party – who is confirmed by parliament in a secret ballot.

Wassmuth, a qualified structural engineer, predicts placing motorways in the hand of PPPs will create numerous parallel structures and make it more expensive to maintain the autobahn in the long term. “You can’t just build infrastructure and leave it there. Roads are machines that need maintenance,” he said.

Even if regional governments such as the ones in Lower Saxony recognise the inefficiency of the new PPP model, they will be increasingly powerless to do anything about it. From 2020, Schäuble’s debt brake is due to tighten even further, forbidding any structural deficits whatsoever. States may also have to resort to PPPs for building schools and nurseries.



Germany’s international reputation for high-quality engineering remains a point of pride for the general public, and delays to high-profile building projects such as the Berlin-Brandenburg airport or Stuttgart’s underground rail stations have been met with a mix of outrage and shame. In a recent survey for Der Spiegel, 86% of respondents said the government was investing too little in public infrastructure.

Largely ignored in party manifestos, the issue has crashed on to the agenda in the final stretch of the election campaign and is now a regular talking point at political rallies.

At the end of August it emerged that a consortium operating a PPP-run motorway between Hamburg and Bremen was on the verge of insolvency and wanted to sue the state for damages amounting to €778m. More than 20 hedge funds have reportedly registered an interest in buying up the group’s outstanding bills – a sign that they are confident of being able to make the German state pay up for lost investment.

Far from helping to put a brake on public debt, Germany’s motorways could in future be the place where the state’s expenses go into overdrive.