No Money, No Plan, No Opening Date: More Delays and Chaos for Berlin's New Airport
The opening of Berlin's new airport is likely to be delayed yet again. There are still problems with fire protection systems, and it is unclear who will end up paying for the project's immense cost overruns. The prestige facility may not open its doors until next fall.
It was supposed to be the moment when Berlin's problem-plagued new airport finally turned the corner. The supervisory board had hoped to present a new financial plan at its August 16 meeting, and the airport's new head of planning, Horst Amann, was scheduled to give his report on whether the facility could be opened as planned next March. That, at least, is how Berlin Mayor Klaus Wowereit and Brandenburg Governor Matthias Platzeck had envisioned Thursday's meeting.
Now, though, it looks as though the opening of the new Berlin Brandenburg Airport Willy Brandt (BER) -- already thrice delayed -- will be pushed back yet again. Amann, who has plenty of experience constructing airports, is unable to say with certainty whether the airport will be ready for prime time in March. Sources close to the supervisory board say that he intends to ask for an additional month to evaluate the state of the airport's construction.
The delay is not without consequences. As long as no date has been fixed for the facility's opening, it is impossible to finalize financing efforts to cover the at least 1.2 billion ($1.5 billion) in cost overruns. And that means that the situation of the state airport operating company, which is already slowly running out of money, has become even more precarious.
Experts with the airport operating company already believe that an opening date in March 2013 is unrealistic. Major shareholders, including the German federal government and the state governments of Berlin and Brandenburg, are also preparing for yet another delay. "The summer of 2013 is likely realistic," says one senior Brandenburg politician. Others, however, believe that Berlin's slick, ultra-high-tech prestige project won't go into operation until the fall of 2013.
Not Up to Code
The problems that Amann has found at the construction site since he took on oversight duties on August 1 are immense. Significant elements of the fire protection facilities, including automated door-regulating systems, still don't work perfectly. Much of the wiring is not up to code, and designs will have to be modified.
In an internal progress report completed on June 25, the airport operating company determined that the March opening date can only be realized if a number of conditions are met. Those include the agreement of the construction companies working on the project, the elimination of all inconsistencies in the plans relating to the ongoing construction work and the granting of official approval for the airport's fire protection plan. Furthermore, the fire protection system must be fully operational by the end of this year to ensure sufficient time for the approval process.
It is an extremely ambitious timeline. Planning for the facility's ventilation system, for example, has not even been completed yet. The engineering firm responsible for this task has pledged to submit a final plan by Oct. 15, 2012.
As has often been the case, stop-gap measures are now under consideration, particularly when it comes to project financing. Airport operators have calculated a short-term financing shortfall of some 430 million, which are needed to pay construction bills coming due as well as costs related to the postponement of the airport's original opening date of June 3.
No More Federal Money?
Airport head Rainer Schwarz will propose that the supervisory committee agree to a short-term bridge loan. Such a credit would come with high interest rates because the airport operating company cannot afford the collateral securities. Airport shareholders -- the federal government and the state governments of Berlin and Brandenburg -- will have to use a so-called "parent guarantee" to ensure banks that they are backing the loans of the airport operating company.
A direct loan guarantee is, for the moment, impossible given the fact that the European Commission must first grant its approval. And that is not a given. A working group set up by German Transport Minister Peter Ramsauer has spent weeks sounding out Brussels in an effort to determine the conditions under which further state assistance for the airport might be approved. The Finance Ministry also recently became involved in the endeavor. But the German government cannot make an official request until it is clear how much money the airport still needs and a financing concept has been finalized.
Furthermore, it is not even clear if the federal government is prepared to grant additional funding to the airport project. "Given the chaotic situation and jurisdictions, there can be no additional financial concessions granted to the new capital city airport in the upcoming negotiations for the 2013 federal budget," says Jürgen Koppelin, a senior member of the parliamentary Budget Committee in Berlin.
Eliminating that chaos, it would seem, will take some more time.
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