Berlin Brandenburg: the airport that failed to take off

The UK has had its fair share of landmark construction projects that struggled to reach their completion targets and suffered from soaring costs. Wembley Stadium, Edinburgh’s tram network, and the Scottish Parliament are just some examples of major projects affected by delays and cost over-runs.

But the significant problems affecting these sites appear minor in comparison with the seemingly never-ending story of Berlin’s Brandenburg Airport. It has become a copybook example of flawed project management, and dented Germany’s reputation for efficiency and engineering excellence.

 The economic importance of airports

Once regarded alternately as glamorous gateways or noisy nuisances, these days it’s hard to overstate the significance of airports, not only to their locality, but to national economies.

In 2015, a study found that European airports and associated aviation activity create and facilitate a total of almost 12.5 million jobs, or 675 billion euro in gross domestic product (GDP) each year (that’s just over 4% of the entire European economy). The report noted that, aside from the economic importance of the aviation sector, wider economic activities are facilitated and supported by the connectivity that airports deliver:

“Tourists can spend money in previously unreachable locations. Businesses can produce goods to be consumed in far corners of the world. Investors can set up new offices, call centres and factories exactly where they are needed.”

In the UK, Heathrow Airport has been estimated to support 120,000 jobs and contributes £6.2 billion to the national economy, while Manchester Airport contributes £1.7bn each year to the North West’s economy.

At the same time, delays to the development of airports can have significant negative impacts on economic competitiveness.  The CBI has warned that uncertainty surrounding the construction of a new runway at Heathrow could cost the UK more than £30bn by 2030.

A new airport for a reunited city

Berlin Brandenburg Airport (BER) was supposed to be one of the symbols of the reunited German capital. First announced in 2006, it was intended to replace Berlin’s existing smaller airports – Tempelhof, Tegel and Schönefeld – and to handle a projected 20 million annual passengers.

But, almost from the start, the project ran into difficulties. Property speculators learned of the planned acquisition of new land by the airport authority, bought up the properties and drove up the price. As one observer noted: “The airport corporation was half a billion euros in debt before ground had even been broken.”

As the project grew, so too did the problems. The 2008 global financial crisis meant banks were reluctant to issue loans for the new airport, and private investors backed out. The planned 2011 opening of BER was pushed back to the following year.

Growing faults, soaring costs

In the spring of 2012, all seemed set for BER’s grand opening, with Chancellor Angela Merkel and 10,000 guests invited to attend. But with just a few days’ notice, the inauguration was cancelled due to a fault with fire alarms and smoke extractors.

Hundreds of staff hired by shops for the new airport had to be let go, and airlines that had moved baggage handling facilities to BER had to move them back to Tegel – their claims for damages adding further to the spiralling costs.

The cost overrun of the extraction system added half a billion euro to the budget, and noise protection demanded by nearby residents another 600 million euro. But this was just the tip of a Titanic-sized iceberg.

Hans Brandt, in a report for Deutsche Welle has described the growing list of faults with BER:

“90km of electrical cables were incorrectly installed; all 4000 doors were incorrectly numbered; the escalators were too short; the planner-in-chief was not an engineer, but an imposter; and, last but not least, the emergency line to the fire department was not installed.”

The flight not now departing…

Further scheduled opening dates – May 2013, March 2013, October 2013 – have come and gone. Gone too are some of the key figures involved in the project, including Berlin’s mayor, Klaus Wowereit, whose high-profile role in the project sank his chances of challenging Angela Merkel as Chancellor of Germany. Last year, the airport’s spokesman was fired after claiming in a newspaper interview that “no one, unless he is addicted to drugs, will give you any fixed guarantees for this airport.”

The most unsurprising announcement of 2017 came in January, when BER’s project chief confirmed that the airport would not open this year – the latest hold-up: faulty wiring for 1200 doors.

In the meantime, Berlin’s popularity as a tourist and conference destination has reached stratospheric heights. Tempelhof Airport closed in 2008, but last year Tegel and Schönefeld airports handled over 30 million passengers, higher than any recorded for a single year. As a result, it’s now claimed that on the day that BER finally opens, it will already be under capacity, and will have to be extended.

Capacity problems have prompted many to call for Tegel Airport to remain open after BER eventually becomes operational. Last month, a non-binding referendum saw a majority of Berliners voting in favour of retaining Tegel. However, the airport and city authorities continue to insist that Tegel will be turned into a business park once BER opens.

A byword for ineptitude

As things stand, there is still no firm opening date for BER, and the initial cost estimate of around 2 billion euro has reached nearly 6.5 billion euro.

It’s not unknown for major projects to bounce back from failure:

  • The Scottish Parliament – three years late and ten times over budget – is now a working legislature and has won awards for its architecture, including the prestigious RIBA Stirling prize for the best building in the UK.
  • Wembley Stadium opened in 2007, after years of delay and tripling its cost. But in 2015-16 the venue posted record revenue of £370 million.
  • The Millennium Dome in London, which spent much of its early years being ridiculed as a waste of public money, is today a world-class entertainment venue.

On the other hand, Berlin’s airport authorities might be looking nervously at the experience of Montreal’s Mirabel Airport. Designed to replace the existing Dorval airport that was nearing capacity in 1975, Mirabel never managed to win the support of travellers. In the 1990s, Dorval was reopened to international traffic, while Mirabel was abandoned and eventually demolished.

There are so many lessons to be learned from the BER fiasco that perhaps it would be easier for future project managers to study BER’s entire experience as a model for how not to build an airport.

The German word for ineptitude is unbeholfenheit. But, until Berlin Brandenburg Airport is finally operational, perhaps “BER” can be used as shorthand for any major project that fails to get off the ground.


The Knowledge Exchange provides information services to local authorities, public agencies, research consultancies and commercial organisations across the UK. Follow us on Twitter to see what developments in policy and practice are interesting our research team. 

Rent controls: lessons from Berlin?

 

3953104549_7b217c065d_o

Image: James Carson

In March 2016, a study by the Centre for Economics and Business Research highlighted the growing problem of rising rents in the UK. The Cost of Renting found that the average private rent in England is growing at an annual rate of 2.5%, and forecast that rents were set to rise by 28% on average by 2026. The findings support recent studies suggesting that the UK is now the most expensive place in Europe to rent.

In contrast to the UK, renting in Germany is less expensive. For historical as well as economic reasons, only 43% of Germans are home owners (compared to over 70% in the UK). The rest rent their homes, making rent rises a highly sensitive political issue in Germany.

In recent years, Germany has been experiencing a housing shortage. Last year, the Cologne Institute for Economic Research reported that in 2014 the number of new flats and houses built in the biggest cities was 50% fewer than needed to cope with rising population numbers. As a result, rents in Germany have been rising more steeply.

Introducing rent caps

Last year, concerns about keeping homes affordable for tenants on average incomes prompted the German government to introduce legislation on rent control. The new law means that private landlords taking on new tenants can only raise rents by up to 10% above the local average for similar properties.

Even before the law was passed the state government of Berlin had announced that it would be the first city in Germany to introduce rent controls. In recent years, the German capital has been growing by around 50,000 people a year, putting greater strains on the city’s housing market. Rents in Berlin have risen on average by almost 53% in the past five years, and in some districts, by 79%.

The trend has raised concerns among Berliners that their city could be on the way to emulating London, where growing numbers of people are struggling with the cost of living in their private rented homes. The Cost of Renting report found that Londoners on average spend nearly a third of their disposable income on rent payments, and suggested that worsening rent affordability may push residents on lower incomes out of the capital. Rent control is one measure intended to prevent Berlin going the same way as London.

17333355432_41228f32d5_o

Image: James Carson

The impact of rent controls

Within weeks of Berlin introducing its rent cap, there were signs that the move was having an immediate effect, with the average rents per square metre falling by 3.1%. But in February 2016, a survey of Berlin rents by CBRE found that the year-on-year rise across the city for 2015 was 5% (compared to the 2014 rise of 6.5%).

On the face of it, this looks like the new controls are not working. But the rent cap was always intended to slow down Berlin’s spiralling rents, rather than bring them to a halt, and on those terms the law has been effective. Moreover, while new rents for Berlin’s most expensive apartments rose by 5.7%, rent rises for the cheapest 10% of flats rose by just 2%.

And, as if to underline how serious Berlin is about tackling rising rents, in addition to the rent controls on private landlords, the Berlin state government has also introduced new rules for over 500,000 social and state-owned housing tenants, guaranteeing that rent rises will not price them out of their homes.

Lessons for the UK?

Since Berlin introduced rent controls, other German states, including Hamburg and Bavaria, have followed suit. This has prompted some commentators to wonder if the idea could help to tackle the UK’s housing crisis.

A recent report from Shelter highlighted the serious impact of rising rents in London:

“Those who find it difficult to pay their rent are likely to cut back on food for themselves or clothes for their children. Others get deep into debt to avoid going into rent arrears or to cover the high costs of frequently moving home. At worst, a growing number of London renters lose their home and become homeless.”

Although London has seen the steepest rises, other parts of the UK have also been affected. In April 2016, figures showed that rents on new tenancies in Greater London were, on average, 7.7% higher than a year ago. But in Scotland the increase was 7.3%, just ahead of the East Midlands with 6.8%.

Writing in the Financial Times, columnist Jonathan Eley acknowledged the differences between the UK and German housing markets, including the high numbers of renters in Germany and the larger number of properties owned by institutions (in contrast to the UK, where most private rented sector properties are owned by individual buy-to-let landlords). However, he concluded that the UK had something to learn from the introduction of rent controls in Germany:

“It is not perfect, but it does a much better job of balancing the interests of tenants and owners than the policies of successive UK governments, who have basically ramped up house prices without much thought for the long-term consequences.”

It’s still too early to say whether Germany’s attempt to tackle rising rents will have a long-lasting impact. But if the measures succeed in putting a brake on spiralling rents, there may be growing calls here to follow Berlin’s example.


Further reading
If you’ve enjoyed this blog post, you might also be interested in these previous posts:

Generation rent: are there lessons from Germany?
To regulate or not to regulate? Housing standards in the private rented sector
Support for the squeezed middle: could public subsidies tackle London’s housing crisis?

Follow us on Twitter to see what developments in policy and practice are interesting our research team.

Street art…regeneration tool or environmental nuisance?

“Cities have the capability of providing something for everybody, only because, and only when, they are created by everybody.” (Jane Jacobs, The death and life of great American cities, 1961)

by Morwen Johnson

Last week’s devastating fire in Glasgow School of Art showed the emotional attachment which communities can feel for buildings. The affection felt for the ‘Mack’ wasn’t solely because of its A-listed status or historic value, it was because the building was part of the fabric of the city and many people over the years have been touched by it. Continue reading