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Autobahn privatization rift

November 21, 2016

German Economy Minister Sigmar Gabriel is reportedly blocking the privatization of the country's highway system - a plan floated by Finance Minister Wolfgang Schäuble to finance a massive investment backlog.

Staumonat November Fahrbahnverengung
Image: picture alliance/dpa/K. J. Hildenbrand

According to German daily newspaper Süddeutsche Zeitung, German government plans to partly privatize the country's network of Autobahn highways had been halted due to resistance from the Economy Ministry.

Quoting a ministry spokesperson, the newspaper said Economy Minister Sigmar Gabriel had requested more time to "provide additional assessments" in the current process of coordinating the plan among the ministries.

"An agreement has yet to be reached, Süddeutsche quoted the spokesperson as saying.

The delay renders a government roadmap obsolete, which foresaw the assessment process to be finished by the end of last week.

Schäuble's plan

Ownership of the 13,000 km network, the world's second largest behind the United States and famous for having no speed limits along thousands of its kilometers, is divided evenly between the federal government and the country's 16 states.

In October, federal and regional representatives agreed that the national government should form a company to take over responsibility for the highway system.

German Finance Minister Wolfgang Schäuble is considering selling a stake of just under 50 percent in the new company to allow it to develop the network's infrastructure more efficiently.

It was not clear how much such a sale would raise. But the federal government receives some 4 billion euros ($4.25 billion) per year for its toll on trucks.

Schäuble believes that insurers and other investors in search of investments with solid yields during a prolonged phase of low interest rates would be eager to buy stakes.

Autobahn of the future, CO2 free

Expensive present

However, Schäuble's plan has not only run into fundamental opposition from the Social Democrats (SPD), which is a junior coalition partner in Angela Merkel's conservative-led government.

Germany's biggest opposition party, the Greens, is also opposed to it. They reject Schäuble's argument that a public-private partnership would be an efficient way of running the highway system and say that the proposal would benefit private companies rather than the public interest.

"Schäuble wants to give banks and insurance companies a billion-euro gift," Green Party budget expert Sven-Christian Kindler said.

And indeed, a study conducted by Germany's Federal Audit Office in 2014 concluded that many public-private projects in the transportation sector were more expensive than traditional highway construction.

uhe/jd (Reuters, AFP, dpa)