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PPP and Infrastructure

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Understanding German Real Estate Markets

Part of the book series: Management for Professionals ((MANAGPROF))

Abstract

This chapter examines the role of public private partnerships in the public procurement of public real estate and transportation infrastructure in Germany. Introductory, the general structure and characteristics of PPPs are explicated along with special remarks about specific features of the German PPP approach. This includes the specific role of the financing models applied, especially the role of non-recourse forfeiting of instalments in municipal projects. Further reference is made to the highly divided and complex approach of federal and federal states’ authorities to PPPs. Any federal state set up its very own taskforce that issues guidelines and provides support to municipalities in heterogeneous ways. Nevertheless, on project level, a certain degree of standardization led to different types of contract models in the public real estate sector that are applied consistently throughout Germany on any governmental level. Although, even standardized, models in the road infrastructure sector are applied only on federal level, whereas single projects on state and municipal level can still be considered ‘pilot projects’. Finally, the flow of deals in the public real estate and the road infrastructure sectors are summed up in tables that also feature updated figures for projects in tendering and under preparation.

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Notes

  1. 1.

    The public agent makes use of thorough cost-benefit-analyses to proof value-for-money. Tytko (1999), p. 32.

  2. 2.

    Clifton and Duffield (2006), p. 580; Müller and Turner (2005), p. 401; Spackman (2002), pp. 288–291 and Grout (1997), p. 59.

  3. 3.

    Henschel-Bätz (2005), p. 18 and Tytko (1999), p. 8.

  4. 4.

    Literature reviews imply that long before the financial market crisis it has been argued that the advantage of the leverage-effect depends very much on the current market conditions. Financial structures based on the leverage-effect crucially require non-rising interest rates. Newell and Peng (2008), p. 23; Blanc-Brude and Strange (2007), p. 2; Probitas Partners (2007), p. 9 and Tytko (1999), p. 8.

  5. 5.

    Weber and Alfen (2009), p. 164 and Tytko (1999), p. 10.

  6. 6.

    Pfnür et al. (2008), pp. 153–154; Hopfe et al. (2008), p. 150; Blecken and Meinen (2007), pp. 41–42; Devapriya (2006), p. 563; Henschel-Bätz (2005), p. 18; Sester and Bunsen (2005), p. 438 and Tytko (1999), p. 48.

  7. 7.

    The leeway results from the SPC’s property rights and volume-related risks remained with the SPC. The price of debt for the SPC is lower, if she bears no risks. Leland (1998), p. 1228.

  8. 8.

    Braune (2006), p. 310 and Littwin et al. (2003), p. 22.

  9. 9.

    Schöne (2006), p. 101; Braune (2006), p. 310; Weber et al. (2004), p. 50 and Ertl (2004), p. 40.

  10. 10.

    PD (2014), pp. 6 and 19.

  11. 11.

    Hausmann and Rudolph (2008), p. 156.

  12. 12.

    §2, VIFGG.

  13. 13.

    The PPP-Contracting Model, which used to belong of the group of eligible models has vanished in recent years due to lacking demand. It was designed for special projects that do not feature the construction of buildings, but the design, installation, optimization, operation and maintenance as well as financing of technical facility equipment (HVAC). The contract term was limited between 5 and 15 years, depending on the life cycles of technical facility equipment.

  14. 14.

    PwC et al. (2003).

  15. 15.

    Korn (2008), pp. 61–62.

  16. 16.

    Tytko (1999), p. 23 and p.47.

  17. 17.

    PD (2014), p. 5.

  18. 18.

    PD (2014), p. 6.

  19. 19.

    PD (2014), p. 9.

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Author information

Authors and Affiliations

  1. Bauhaus-University of Weimar, Weimar, Germany

    Hans Wilhelm Alfen

  2. HPC Hamburg Port Consulting GmbH, Hamburg, Germany

    Sven Barckhahn

Authors
  1. Hans Wilhelm Alfen
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  2. Sven Barckhahn
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Correspondence to Hans Wilhelm Alfen .

Editor information

Editors and Affiliations

  1. International Real Estate Business School (IRE|BS), University of Regensburg, Regensburg, Germany

    Tobias Just

  2. University of Hamburg, Hamburg, Germany

    Wolfgang Maennig

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Alfen, H.W., Barckhahn, S. (2017). PPP and Infrastructure. In: Just, T., Maennig, W. (eds) Understanding German Real Estate Markets. Management for Professionals. Springer, Cham. https://doi.org/10.1007/978-3-319-32031-1_30

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