The deliberate impoverishment of public budgets, coupled with the introduction of limits on new debt for federal and state budgets, meant that cash-strapped municipalities were either unable to invest (investment backlog) or PPP projects were increasingly used as alternative financing models for necessary investments. Especially when a credit-financed conventional implementation of the same planned measure would have resulted in a new debt in violation of the Basic Law or. would have resulted in new borrowing in violation of the relevant state law. Future budgets will, however, be tied up in these PPP projects by the public sector's contractual obligation to pay user charges of the same or a similar nature as interest and redemption payment obligations or. burdens.
What is the purpose of PPP
- In the case of PPP, loans, which always have to be taken out in order to build and renovate, are not taken out by the state but by the private company, which has to pay more debit interest than the state. (They could go broke!) These debts of private individuals to banks are not counted as public debt of the Federal Republic of Germany! (PPP booking trick)
- With PPP, the private "partner" hijacks the state as a money collector for the guaranteed returns (credit interest) per 30-year contract and additionally lets the users pay the more expensive debit interest for the loans. It is characteristic for concessions in the field of trunk roads that the private party is entrusted with the provision of services according to the PPP contract and does not receive any remuneration in return, but rather the right to levy and collect a toll.
- PPP contracts are never public but always secret, even more so before they are concluded. Even when it comes to core public services (water/roads), they are classified as trade and business secrets. Treason (even if done in the interest of the common good) is prohibited under penalty of law!
So we can clearly see who are the winners of PPP projects and who are the losers! That is why the Federal Audit Office unanimously rejects PPPs. The federal government brushes aside this criticism and pursues its goal. The goal is privatization! The citizens, however, must not know this before the big deal is decided at their expense!
The proposals of the CDU and SPD government on the Autobahn
The German government introduced its draft legislation to the Bundestag for consultation in December 2016, and the intended resolution is to be passed in May. If this succeeds with the votes of SPD and CDU, the federal government will have come considerably closer to the goal described above. The draft legislation, Printed Paper 18/11131, amends the Basic Law in 13 places, Printed Paper 18/11135 regulates the exit from the old Lander fiscal equalization system (blackmail potential of the federal government), the associated "accompanying laws" such as the InfrGG regulate – or allow – the banks to decide on national ownership.
What is in the government's drafts ?
A new company is to be "compulsorily" established under private law. One could have chosen public law – but NO – that is exactly what they do not want to do! The legal form should be a limited liability company, which can also be converted into a joint stock company after 4 years (mandatory evaluation requirement in the law). There is no parliamentary involvement in this in the law. Which means the federal government can then do it alone.
If the laws were not changed and so passed, then the debts of the new federal trunk road company would NOT be attributed to the state FRG in the sense of the European debt brake.
This would achieve the goal of investing without the debts for which the state guarantees being visible. Redistribution from the bottom up as well. Banks cheer. We pay! So for this, the constitution – the basic law – is interfered with. With serious consequences for the community and to the detriment of the common good.
How exactly is this to work?
The change in the Basic Law Art. 90 GG should in the future legitimize the private law company to take unlimited loans,to determine the toll amount and the deputies should agree to disempower themselves. In future, the Basic Law shall state:
"(1) The federal government shall be the owner of the federal highways and other federal trunk roads. The property is inalienable."
"(2) The administration of the Federal highways shall be conducted under Federal administration. The federal government can use a company under private law to carry out its tasks. This company is inalienably owned by the federal government. The details are regulated by a federal law"
Thus, a transfer of common ownership of the highways to the banks takes place.
How so, it says "inalienable property" doesn't sound bad, does it?? It goes like this: How much does the private company pay the federal government for the economic right to derive benefits from the highways? The private company is lt. Bill granted the usufruct (and other rights) to the highways. Usufruct means the unrestricted right to exploit the fruits of one's own labor. The usufruct granted is therefore the (property) legal basis for the Autobahn Company to collect user fees (in particular the truck toll and infrastructure charge = passenger car toll). They virtually then own the highways, because buying them back is unaffordable. A fee must be paid for such a usufruct! So there will be a flow of money from the private company to the federal government. However, the law itself does not stipulate that this legal transaction must be made public! The law does not say how much money is to flow and who is to regulate it. The "silence" has the consequence, in terms of competence, that the design and the determination of the conditions lie with the federal government- not with the parliament. This is politically explosive, because this is where the expropriation of citizens takes place. The banks now have access to our property through the company's loans.
Again, because it is so important: The private company is to be transferred the economic ownership and the usufruct of it – in exchange for money. In order to be able to pay for this, the new company must take out loans (borrowed capital). This leads to a substantial foundation debt of the company and (as convenient for Mr. Schauble) to the outsourcing of the debts of this company from the public budget. What are the highways (today common property) worth and how much should this company pay for the usufruct? 150 billion. Euro or more? This is reminiscent of the Treuhand! The company finances ca. 76% of the amount with outside capital, which it fetches from banks. They now have secure interest income. The company, however, is 76% in debt and has to waste a lot of money of the future toll revenues, called "infrastructure levy", permanently for these interest expenses to banks! However, the company is soon to be self-supporting- so the toll must necessarily increase! The toll is intentionally not called "tax", because an infrastructure tax would have to flow into the federal budget, the use of which is determined by the members of parliament. Translated, this means that citizens will be deprived of their property and will have to pay an "infrastructure tax" for it afterwards. The winners are: The banks and investors.
The federal government plans to build up the federal highway company in phases.
Phase 0:
Transfer of management of federal highways from the states to the company
Phase 1:
Start of operation of the company
Phase 2:
Transfer of the economic ownership of the freeways to the company (founding debt)
The private company as "infrastructure provider". The company is to start operating from 1.1.In 2021, receive the revenue for the route network within its jurisdiction in its own right. The federal trunk highway corporation may expressly involve private third parties. This means that public-private partnerships are explicitly possible.
Conclusion: the company is indebted with its creation and nothing has happened yet on the roads. This is then compounded by expensive PPP contracts and the undermining of workers' rights to do the actual work on the roads.
Centralization and disempowerment of MPs, according to the draft of Merkel, Schauble and Gabriel
- The new company is in the hands of the executive, i.e., the government, the Bundestag is merely "briefed". With the transfer of the task to this society administration-specific control instruments are void. There are no new ones.
- In the "accompanying law" it is stated who in the company lt. Federal government is to determine. The government is represented there by the Federal Ministry of Transport and Digital Infrastructure.
- The private-law infrastructure company is to be given a new lease of life from 1.1.2021 Transfer planning, construction, operation, maintenance and asset management and funding of federal highways. And "insofar as the tasks of the transport infrastructure financing company are transferred to the company under private law, the latter is also responsible for the financial management for the federal highways."
- The new law does not provide for a state guarantee for the company's debts, neither at the constitutional nor at the legal level, which allows privatization and drives up the cost of capital (debit interest) that the user has to pay..
What does the government's draft (intentionally) not contain?
The draft laws do not contain any specific regulatory rights for auditing by the Federal Audit Office, which would be important especially before possible decisions by the company for explicitly permitted PPP contracts of the subsidiaries.
- The "silence" in the law leaves open for the future government where the decisions on the financing and realization plans are made (the parliament is "outside"). The shift of authority from the Bundestag to the private company is comprehensive. The private-law company thus decides on distribution issues. The parliament is only allowed to decide on the "demand plan". However, the private company is not legally bound by the "needs panel" passed by parliament. With regard to the expenditures for planning, construction, maintenance and operation and the decision what is necessary or is built first, the federal parliament is disempowered.
- In the future, the Bundestag will only have influence if it contributes extra money from the federal budget.
- The infrastructure company is by law NOT to transparency
- Government drafts do not commit to a specific business and funding model. In particular, no commitment is made for future investment financing. This means that everything is possible – including PPPs.
- The "silence" in the law on the amount of borrowing by the company means that there are no constitutional or legal limits on the company taking out loans. This would allow the company to incur unlimited debt (the collateral for this would be the highways, to which the private company would acquire the usufruct).
- It would also be possible to transfer these debts out of the public federal budget through the acquisition of the usufructuary right to the federal highways by the private company from the state, financed with borrowed capital.
Where is the journey going? The target state of the private company is to become completely user-financed (in perspective, a self-sustaining business model). The German Michel is thus to pay everything (in addition) to the tax and duty burden. This also affects those who have so little that they pay no taxes at all.
The aides and the sums
The "Fratzscher Commission", convened by Minister of Economics Gabriel, advocates the model: "Invest while complying with the 'debt brake'", although the debts are there after all. In your 2015 final report, they calculate as follows: Starting in 2016, not only toll revenues, but all federal highway construction funds will be managed by VIAG. In 2013 this amounted to 46 billion. € (8.5 billion. 32.9 billion in vehicle tax. € energy tax, formerly mineral oil tax) and 4.4 billion. € truck toll, whose extension was just decided. This increased the truck income by approx. 380 million € per year. The planned car toll ca. 3 billion. € not yet counted. This money then flows to the new private company from its inception. Huge sums therefore. There is no talk about it!
The SPD group wants something – but what??
The SPD parliamentary group – unlike their own government members and their former party leader – would like to enable in the laws,
- That functional privatization is excluded,
- that PPPs are excluded altogether for the future
- that the participation of private third parties in possible subsidiaries is excluded
- That right of the company to borrow is excluded or at least limited. Old debts should not be transferred to the company and the company should in no way be geared to be able to take on debts that are not attributed to the FRG in terms of the Maastricht criteria (which is the goal with all PPP contracts).
Normal also previously conventional contracting, that is, when road construction projects private companies z.B. be entrusted with construction and planning management should continue to be possible. But how does the SPD faction plan to get this through at the constitutional level by May? How and when do members of parliament plan to publicly discuss the SPD's proposed changes to the legislation. Are there then still possibilities of change? The CDU/SPD federal government has made PPP possible in many places in the draft law. Politically, PPP was once the declared goal of the federal SPD, which passed "PPP acceleration laws" under Schroder under Muntefering, which are still in force today. A political departure from this has not yet been made public! If it is not made by prominent public figures by May 2017, it is also not credible and will not be implemented. This would therefore be a deception. Credibility gone!
There is only one way: reject the basic law amendments for the infrastructure company highway. The hopeful for justice and mobilization of the base for an SPD chancellor Martin Schulz must therefore soon show his colors!
Gerlinde Schermer is an SPD federal party conference delegate and initiator of the call "SPD: Reject highway privatization!", the already 33.000 SPD members have signed the petition (as at 4.5.2017).