PPP debate intensifies as German ministers meet

Investors and policymakers issue PPP policy proposals as future of transport infrastructure procurement in Germany will be discussed between federal and state transport ministers today

A two-day Conference of Transport Ministers got underway today in Worns with federal minister Alexander Dobrindt’s report on the current transport policy situation, and the sustainable financing of transport infrastructure, top of the agenda.

Policy debate in Germany is focused on the 10-point plan issued by the government-appointed Fratzscher Commission in April. Among the key proposals from the commission up for discussion is the recommendation to use PPP to finance infrastructure; the establishment of a new independent federal transport agency (Bundesfernstraßengesellschaft) and the establishment of a public-private infrastructure fund to finance local projects.

The federal cabinet is to decide on the implementation of the 10 proposals in mid-November.

Ahead of the conference in Worns, the Association of German Insurers (GDV) and the Central Association of the German Construction Industry (HDB) published a joint position paper on the implementation of the proposals and demanding better conditions for investment in infrastructure.

The GDV and HDB are in favour of a compulsory objective economic study prior to any construction project. They argue that this would provide economic benefits and provide a fair comparison between models with private participation and traditional public procurement. This would demonstrate that roads are not being privatised through PPP and increase project pipeline.

They also support the view that private partners should play a central role in the new federal motorway agency and the municipal level public infrastructure fund could mobilise private capital.

It has also been reiterated that in order to facilitate investments of insurers, the capital requirements for infrastructure investments should also be reduced under the future regulatory framework Solvency II.