Berlin Brandenburg Airport
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State Court of Auditors criticizes billion-euro renovation of BER
Thu 09.02.23 | 06:08 | From
In the corona pandemic, BER Airport narrowly avoided bankruptcy. The rescue came in the form of a multi-billion dollar recovery plan. It might have been 800 million euros cheaper, says the Court of Auditors. By Rene Althammer
Reports from the state audit office are often a bit “dry”, not really stimulating reading. All the more striking are the statements on the multi-billion dollar renovation concept of Flughafengesellschaft Berlin Brandenburg GmbH (FBB) in the confidential part of the 2022 annual report.
Without beating about the bush, the auditors accuse the Berlin Senate Department of Finance of serious omissions, which also affect the federal government and the state of Brandenburg as co-owners. According to the Court of Auditors, the administration headed by SPD finance senator Matthias Kollatz “did not properly prepare for the financial restructuring of Flughafen Berlin-Brandenburg GmbH and failed to demonstrate its profitability”. The document is available to the rbb24 research editors.
According to the Court of Auditors, a renovation concept that was a good 822 million euros cheaper has not been adequately examined. For the city of Berlin, based on its share (37 percent) in FBB, that would be around 304 million euros.
Alternative for 822 million euros less
The new BER cost almost 6 billion euros – without the capital costs – until the opening. And then Corona came, air traffic collapsed and in 2021 bankruptcy was just averted.
The FBB then developed four renovation models. Insolvency and partial privatization were immediately ruled out by the shareholders. What remained was the so-called “status quo model” with “needs-based injection of liquidity until 2031”.
With this model, the shareholders would have had to extend their guarantees. The Corona loans would have been converted into equity. Everything would have remained as it is – but the planned financial independence of the FBB would have been postponed from 2026 to 2033. Costs according to FBB for the shareholders: 1.093 billion euros.
But this model was not chosen: the partial debt relief model was chosen. Behind this was probably the desire for FBB to become financially independent from 2026 and be able to take out loans on the capital market without public guarantees. With that, the repeated calls for “fresh money” should finally be off the table. Costs for taxpayers according to the FBB template: 1.915 billion euros.
Inexpensive variant not tested
In the opinion of the State Audit Office, the Berlin Senate Administration should have carried out “its own appropriate economic feasibility study” according to the budgetary regulations. But that, according to the accusation, did not happen. The Senate administration was therefore also “not able to adequately prove whether the restructuring alternative of partial debt relief currently being pursued represents the most economical solution and whether the budget is not burdened beyond what is necessary.”
FBB has presented its own low-cost model
The accusation weighs heavily, because as early as March 2021, Department II of the Senate Department, which is responsible for “financial policy and budget”, compared the two restructuring models. Result according to the Court of Auditors: “They found that the partial debt relief model would lead to a significantly higher burden on the budget of around €250 million at the time in a shorter period of time.”
However, the decision was made differently – without an examination. As a result, the Senate administration “has taken the risk that the goal of capital market viability and financial independence of FBB cannot be achieved from 2026. Even if the target figures according to the 2021 business plan are reached, the Court of Auditors does not consider the creation of unsecured follow-up financing to be sufficient secured.”
In this case, it could be even more expensive for the shareholders – Berlin, Brandenburg, the federal government – if the goal is not achieved.
Why the more expensive model?
Answer from the Senate Department to the State Court of Auditors: “The status quo model was … eliminated for reasons of state aid due to lack of feasibility.” This means that the Senate administration claims that the EU Commission would not have approved such a model that Berlin alone could cost 304 million euros less.
The auditors, on the other hand, candidly state that the Senate administration did not even discuss this model with the EU Commission.
When asked by rbb, the Berlin Senate Department for Finance reported that the shareholders of FBB would implement “the most economical restructuring alternative” with “partial debt relief”. “Other alternatives, including measures in the sense of the status quo at the time, which only ensure the company’s liquidity, do not allow for sustainable financing and also do not allow for self-employment in the future.”
At the same time, the tax authorities concede that there was no “detailed examination of state aid law”. It was “not effective and from a local point of view would have had little chance of success.”
Broadcast: rbb24 Inforadio, February 9th, 2023, 6:20 a.m