#german infrastructure

By Sara Miller Llana, CS Monitor, March 12, 2015

Cologne and Berlin, Germany--From abroad, the German reputation for precision and productivity appears impeccable. Be it in the production of top-flight cars or making sure city metros remain on time, Germany is always a model of efficiency and effectiveness.

Or so many think. But try a long commute over the country’s aging infrastructure, and you may come away with a different view.

Crumbling bridges, lengthy detours, snarled traffic on an aging autobahn: This is the news that has captured headlines at home, raising questions about the state of Germany’s infrastructure and its willingness to whip it into better shape.

The concern runs deeper than hardware and frameworks, schedules and scaffolding. Some pessimists are starting to see physical decline as a sign of larger strain on--and vulnerability in--the German economy.

Germany has long had a knack for making and doing things better. “From the outside everyone thinks Germany is clean, efficient, and everything works well,” says Steffi Klotz as she crosses Cologne’s Leverkusen Bridge, a cable structure spanning the Rhine that is part of her daily commute. “I’m sorry to say that’s not the case anymore.”

Her commute pits her daily against Germany’s chronic underinvestment. The Leverkusen Bridge was a prime example of Germany’s desperate need for investment in a 2013 government report. Built in the 1960s, it was closed down to heavy traffic in 2012 because of cracks that required immediate repair. It is now under continual construction and patch-up, meaning its six lanes are merged into fewer, backing up traffic for miles.

For Ms. Klotz, that turns a drive that should take 25 minutes into one that regularly takes 90 minutes. It’s so bad that she says the traffic reports on Monday mornings don’t even bother with back-ups that are less than five kilometers (three miles). Traffic is what is on the minds at dinner tables, and late arrivals, not the norm in Germany, are easily forgiven.

“We lose time every day because of our infrastructure,” she says.

Jurgen Berlitz, from the German automobile association ADAC, says that in in 2014 there were 475,000 traffic jams totaling 960,000 km (600,000 miles), up from figures in 2013 that showed 415,000 traffic jams totaling 830,000 km (515,000 miles), with a sixth of roadways congested daily.

That’s because some 46 percent of bridges, 41 percent of streets, and 20 percent of highways are currently in need of repair, according to a report by the German Institute for Economic Research (DIW) in Berlin. That group is headed by Marcel Fratzscher, the author of another new book called “The Germany Illusion.”

Chancellor Merkel seemed to respond at the end of last year when she announced $12.4 billion in additional investment. The IMF, in its global outlook report in October, had singled out Germany for “much-needed public investment in infrastructure.”

Germany still has better infrastructure than many of its peers, including the United States. But industry leaders worry that the country is slipping, especially in western Germany where business booms but infrastructure lags. (Eastern Germany, which played catch-up in the post-communist 1990s, runs much more smoothly today.)

“It is now high noon to say we have to defend our infrastructure. It’s also a question of efficiency, and the German way of thinking and doing,” says Volker Treier, managing director of international economic affairs at of the German Chamber of Industry and Commerce.

Indeed, German “thinking and doing” is reason for both the country’s current success and its resistance to change.

While the economies of its peers have withered, Germany has basked in a second Wirtschaftswunder, or economic miracle. It has unemployment rates that French, Spanish, or Italian officials envy--drawing those nationals across its borders--as it creates machines and churns out exports. And the economy has rebounded, after dangerously stagnating last spring and summer.

But at the same time, Germany has been constrained by its own drive to balance its budget, and a population not interested in infrastructure spending. As Mr. Treier puts it: “We see ourselves in a straight-jacket.”

Germany underwent painful reforms in the 1990s, when it was considered the “sick man of Europe,” to get where it is today. There is a prevailing attitude among Germans that now is the time to be rewarded for that sacrifice. In addition, there is a deep resentment about the role the EU is playing in German affairs, pushing the country to act in foreign conflict or pay for the troubles in other European nations.

According to polls, some 80 percent of respondents consistently accept taking on more public debt to fund pensions, but in a poll last fall, about the same percentage rejected investing in public works to combat the downturn if it meant debt.

Mr. Gersemann says that demography shapes the mindset. The average age of Germans is 45 years old, according to 2013 figures, and quickly creeping up. “It’s the beginning of the gerontocracy,” or what he says is a population not willing today to pay for the projects of tomorrow. They disproportionately represent the so-called Wutburger movement, after a German word that translates into “enraged citizen.” The Wutburgers have been leading voices protesting big infrastructure projects in Germany.

“They want the country to stay the way it is,” he says. But, he stresses in his book, if Germany stays as it currently is, it is destined to decline.

And so, politicians respond accordingly. Gernot Sieg, a transportation expert at the University of Muenster, says that the public wants money put toward pensions or schools, and not toward big public works or infrastructure projects. “Most politicians talk not about efficiency but about fairness and social spending,” he says.

In fact, the investment plan Ms. Merkel announced in November has already been scaled back to 7 billion euros over three years, representing just 0.1 percent of GDP annually. And federal investments are just part of the solution, as states play a major role in the infrastructure within their jurisdictions.

And when a single bridge is shut down, an entire chain of production is impacted, says Kurt Bodewig, who headed the government commission in 2013 tasked with prescribing remedies for Germany’s infrastructure woes.

By Michael Birnbaum, Washington Post, December 30, 2013

HAMBURG, Germany--Flawless autobahns and punctual trains are as much a part of Germany's image as Beethoven and Goethe. But the country's famed infrastructure is starting to crumble.

The once-soaring bridges are sagging. Some trains' switching equipment, once top-of-the-line, haven't been updated since the time of the kaisers. Well-engineered canal locks are succumbing to silt and neglect.

Germany's network of roads and railroads is one of the densest and most developed in the world. But the bottlenecks are starting to crimp Germany's export-driven economy, experts say. Even maintaining the status quo will require nearly doubling current levels of spending, according to a recent report issued by a government commission.

Peter Osse, a shipper in the port of Hamburg, says he increasingly reaches not for a timetable but a prayer book when he makes transportation plans.

Osse's hundred-year-old warehouse is at the center of a port through which much of Germany's exports are shipped. But next year, Hamburg's soaring Koehlbrand Bridge, which joins the city's port to its mainland, will undergo major reconstruction, cutting the number of lanes from four to two for much of the year.

"In the near future we will have a crisis," Osse said in a cramped dockside office littered with shipping manifests and memorabilia from the local St. Pauli soccer club. He said transportation was already far slower than it was 20 years ago.

"We don't have many possibilities," he said. So he was resorting to a higher power next year, he said. "My family and I go to church."

As Chancellor Angela Merkel heads into her third four-year term, calls are growing for her to do more to address a problem that some officials say is rapidly speeding out of control.

"Germany is the second-largest of the world's exporting nations, but only if our transport system is functioning. If not, our economy will be in a dangerous situation," said Kurt Bodewig, a former transportation minister who led a federal commission that recently recommended that Germany needs to spend $9.7 billion a year more on infrastructure just to maintain its current network. Merkel's new coalition agreement increases spending by a fifth that much.

The problems started at the time of German reunification in 1990, experts say. The government poured vast sums of money into the former East Germany, where some roads and railways had barely been maintained. Now much of the east German countryside has sparkling new highways, but not many people to drive on them--Germany's population and industry have moved westward. Infrastructure in the richer western half of Germany, meanwhile, has been neglected.

Now, nearly half of Germany's municipal bridges and one-fifth of its highways are considered to be in poor condition, according to federal data and a study by the German Institute for Urban Studies. In 2011, the most recent year for which figures are available, Germany spent 0.6 percent of its gross domestic product on building and maintaining inland transportation infrastructure, according to the Organization for Economic Cooperation and Development. That was less than France, Britain, Canada and many others in the developed world.

And the quality of Germany's infrastructure has been slipping in international rankings. Germany placed 10th in the world in 2013 in terms of quality of overall infrastructure according to surveys by the World Economic Forum, down from third place in 2006. The United States was 19th-ranked in 2013, down from eighth in 2006.

"There will be changes if we do not solve this problem--that's for sure," said Gunther Bonz, president of the Hamburg Port Business Association. "If you do not invest now, in 10 or 15 years from now we will have a situation as we do in Southern Europe," where infrastructure is in worse shape than in Germany.

Further constricting the available money, the German government has been pursuing self-imposed austerity, restraining its borrowing and spending to balance the budget--an aim that will be reached next year. The Treasury Department and the International Monetary Fund have blasted Germany for relying too heavily on exports and not enough on domestic demand to sustain its economy, a policy that makes it far harder for its struggling neighbors to recover, the policymakers say.

Spending more money on infrastructure would be a classic way to stimulate the domestic economy. But in a nation whose language uses the same word for "debt" and "guilt," the efforts to restrain borrowing have broad political support.

Still, a growing number of critics say that borrowing to invest in infrastructure in the name of ensuring economic growth is different from borrowing to pay day-to-day expenses such as salaries or pensions.

And some say there are other ways to boost money for transportation, such as tolls.

"If you increase investments in streets, bridges and railroads, you obviously are encouraging domestic consumption. After all, everybody is yelling at the Germans to do more at home, so let's do it," said Klaus-Peter Mueller, chairman of the German Traffic Forum.

More money would help avert incidents such as the one in December 2012, when authorities suddenly closed a major bridge over the Rhine River outside Cologne to truck traffic for three months, snarling traffic and causing chaos within Germany's transportation system. It cost the German economy between $83 million and $110 million, according to a study commissioned by the Initiative for Traffic Infrastructure, an industry group that advocates for more investment in roads.

A McKinsey study this year estimated that Germany needs to invest $69 billion in its roads to meet expected demand in the coming years.

By Suzanne Daley and Alison Smale, NY Times, November 20, 2013

PADERBORN, Germany--When inspectors decided a few months ago that the aging bridge over the Kiel Canal in northern Germany was too weak for heavy truck traffic, Holger Dechant, hired to deliver giant wind turbines to the other side, was at a loss.

He did eventually come up with an alternative route. But it is telling of the sorry state of some of Germany's roads and bridges: His company is driving the turbines to a ferry, shipping them north to Denmark and then driving them south again back into Germany.

"That's how bad it is," Mr. Dechant said recently, explaining the 186-mile detour in his office here. "We just haven't invested enough. And now there is trouble because there is no easy button to fix it all."

Germany was once known for its superfast autobahns, efficient industry and ability to rally public resources for big projects, like integration with the former East Germany. But more recently, it has been forced to confront a somewhat uncharacteristic problem: Its infrastructure--roads, bridges, train tracks, waterways and the like--is aging in a way that experts say could undermine its economic growth for years to come.

As it has been preaching austerity to its neighbors, Germany itself has kept a tight rein on spending at home. Now critics abroad, including the European Union and the United States, are pressing it to do more to stimulate its own economy, and Chancellor Angela Merkel's likely partners in a new coalition government, the left-leaning Social Democrats, are seeking more money for a variety of domestic programs.

A good place to start plowing money into, many experts say, is the nation's physical underpinnings. A government-appointed commission recently concluded that it needed to spend 7.2 billion euros a year, or $9.7 billion, for the next 15 years--roughly 70 percent more than it spends now--just to get existing infrastructure back into shape. Others say that even more is needed for schools, for instance, and for extending fiber optic cables to less populated areas.

"If we don't spend," said Kurt Bodewig, who heads the government commission, "then I think that Germany will fall behind. If we don't spend, then the next factories will not be built here."

An earlier report by the German Institute for Economic Research was even harsher in its assessment, saying that other European Union countries were doing far more to ensure their futures. "It is high time that Germany handles its lack of investment," the report said.

It is not clear where the money might come from, especially given the aversion of Ms. Merkel's conservatives to higher taxes. The $270 million budget surplus projected for next year, even if given over entirely to roads and bridges, would not be nearly enough to match what the government commission said was needed, and there are many other issues competing for funding. One solution may be a highway toll. Ms. Merkel's conservative partners in Bavaria are insisting on such a tax, which could be paired with reductions on existing taxes on domestic drivers and businesses but affect millions of foreign citizens and businesses traversing Germany.

Some critics worry that even if additional money starts flowing in soon, it may not come in time to avoid major problems, which are already beginning to surface. A year ago this month, inspectors found tears in the steel supports under a major highway bridge outside Cologne, Germany's fourth-largest city. Officials quickly restricted traffic and banned heavy trucks, forcing detours to four other bridges around the city that, officials now say, will need $202 million worth of repairs. The detours were costly to local businesses and backed traffic up for miles each day.

Almost immediately, companies in the area began pressing the Federation of German Industry do something. The business association, which is now pushing for spending at least an additional $5.4 billion a year on maintenance, has calculated that the partial closing of that bridge cost local industry 60 million to 80 million euros (about $80 million to $110 million) during a three-month period.

Regional officials worry that the area's aging infrastructure will prompt industries to move elsewhere or make their products less cost-competitive. Mr. Dechant, for instance, said the route through Denmark cost 50 percent more than a delivery over the Kiel bridge.

"It can take 20 years to build a new bridge," said Michael Groschek, the transport minister for North-Rhine Westphalia, the state that encompasses Cologne and includes dozens of bridges built 50 or 60 years ago, when average truck loads were lighter. "And we don't know whether the current bridges can last that long."

From 1991 to 2012, Germany reduced its budget for maintenance by 20 percent, according to Gernot Sieg, a transportation expert and professor at the University of Muenster. It now spends 1.5 percent of its gross domestic product on maintenance, compared with a European average of 2.5 percent. About 46 percent of Germany's bridges, 41 percent of its streets and 20 percent of its highways need repair, Dr. Sieg said.

Germany went on a building spree when the East and the West were reunited in 1990. Most of the spending was directed to the East, which was in dire need of modernization. The problem, experts say, is that the West got short shrift, even as many former East Germans moved West looking for jobs. In a short period of time, roads and bridges in the West began taking a pounding they were never built for. The bridge with the tear near Cologne was built for 35,000 cars a day, but now handles 120,000, officials said.