Expert Warns of Construction Sector Collapse: Urgent Action Required

Germany's infrastructure challenges have reached critical levels, with deteriorating roads, bridges, and ongoing issues within the Deutsche Bahn. The government has allocated EUR400 billion in special funds aimed at addressing these challenges, yet the construction industry continues to face significant hurdles.

The construction sector in Germany is mired in a structural crisis, with experts warning that if solutions are not implemented swiftly, the consequences could be dire. Klaus-Peter Stöppler, a construction expert, emphasizes the urgency of the situation, stating that the funds may be squandered unless clear goals and a modern, digital infrastructure are established within the sector.

Stöppler expresses concern that if the current issues are not resolved within the next three years, there will be substantial layoffs in construction companies, and skilled workers may migrate abroad in search of better opportunities. The lack of a detailed plan has exacerbated the situation, as the government currently lacks a definitive roadmap for the execution of infrastructure projects.

The Federal Ministry of Economics is reportedly working on a law and an economic plan to allocate the funds effectively, but specific details remain unclear. Similarly, the Federal Ministry of Construction is unable to provide concrete information regarding its initiatives.

Another pressing issue is the insufficient capacity to execute these projects. A study by the German Institute for Urban Studies indicates that planning offices and permitting authorities are already overwhelmed. The slow bureaucracy complicates the awarding of contracts and extends the approval process for projects. Currently, it takes approximately 25 months to receive project approval, and changes in legal frameworks during this time can necessitate further revisions to plans.

Municipalities responsible for implementing these infrastructure projects are also struggling with capacity shortages, leading to delays in approving even basic projects like bridge renovations. Many approved funds for school renovations remain unutilized due to the impracticality of execution.

Experts argue that simply injecting more money into these projects without addressing the underlying structural issues will not lead to improvement. Andreas Knie from the Berlin Social Science Research Center highlights the need for significant bureaucratic simplification and comprehensive administrative reforms. Without these changes, there is a risk that the allocated funds for infrastructure will go unutilized.

The construction sector itself is also criticized for lacking an efficient overall process. Tim-Oliver Müller, the CEO of the Main Association of the German Construction Industry, points out that while there are available capacities within the industry, the overall process remains inefficient.

In response to the crisis, the government has initiated measures to expedite planning through new legislation aimed at reducing environmental and construction regulations and facilitating the digitalization of planning processes. However, many professionals in the construction field feel that these measures are insufficient. Müller suggests the introduction of a cut-off date rule to stabilize the legal and factual situation for construction projects, which would eliminate the need for planning verification procedures.

Although substantial financial resources are currently available for renovation projects, long-term infrastructure initiatives require financial security for effective planning. Earlier this year, the state-owned Autobahn GmbH announced a halt to new contracts for 2025 due to a lack of additional funds not yet drawn from the special budget, leading to significant delays in the renovation of critical bridge structures.

Recent reports indicate that the Federal Ministry of Transport is now releasing approximately EUR450 million in over-budget expenditures from the special fund, with an additional EUR709 million planned. This funding will enable Autobahn GmbH to initiate new tenders and prepare for planned construction projects.

Experts advocate for the financial independence of Autobahn GmbH to ensure reliable and efficient planning of long-term large-scale projects, such as road renovations. To realize ambitious infrastructure goals by 2040, a comprehensive master plan, long-term financial security, streamlined processes, clear responsibilities, and improved legal frameworks are essential. Only through effective collaboration among federal, state, and municipal authorities, alongside significant reductions in bureaucratic red tape, can the ambitious infrastructure plans be successfully executed.