Risks for the implementation of the special infrastructure and climate neutrality fund

First of all, the off-budget fund is not large enough. The federal government has essentially solved its financing problems for infrastructure, which could primarily benefit the rail infrastructure. States and municipalities, on the other hand, can only cover about one-fifth of their additional investment needs with their share. Municipalities are structurally underfunded and need long-term support that goes beyond the off-budget fund.

Additional capacity is needed to turn these billions into infrastructure. Underground construction (German: Tiefbau, includes e. g. streets, railways, and bridges) is particularly important for renovating roads, railways, and bridges. Around €18.8 billion per year should be made available from the off-budget fund for this purpose, which would correspond to a 17.9 percent increase in capacity. However, underground construction, is already operating close to full capacity. In addition, there is a severe shortage of skilled workers, from skilled laborers and foremen to civil engineers – there is already a shortage of over 4,000 qualified workers in these professions. An above-average number of underground construction specialists will be retiring in the next few years. The situation is similar in many other construction professions. Over the past ten years, employment in construction has only been able to grow due to immigration, mostly from the countries of the eastern enlargement of the EU. However, this source is currently drying up, which is why Germany should specifically recruit construction workers from non-EU countries. In addition, the emigration of already integrated foreigners must be reduced.

Together with building construction (German: Hochbau, opposite of Tiefbau), where there are capacity reserves, the off-budget fund will provide around €30 billion annually for additional construction contracts over the next 12 years. In order to be able to award these contracts publicly, procurement capacities would have to increase by around two-thirds. However, there is already a shortage of almost 10,000 experts in construction planning and supervision, a large proportion of whom are managers. Meanwhile, the number of first-year civil engineering students is declining. It seems utopian to expand capacities to the necessary extent. The only solution here is to radically simplify planning, procurement, and regulation so that the available workforce is sufficient. Further potential can be tapped through career guidance and further education. In general, a political increase in labor demand in an economic sector should always be accompanied by a strategy to increase the corresponding labor supply.

Demand must not rise faster than capacity, as this would only lead to price increases. A three percentage point increase in inflation would render €100 billion of the off-budget fund worthless. Therefore, the investment path should be trapezoidal, with a slow build-up, a plateau, and a slow decline at the end, so that construction companies and the entire supply chain can actually deliver the required capacity. Capacity expansion also requires predictability, which is why the investment paths should be supported by a broad political majority that goes beyond the current government majority.

These key challenges must be overcome for the off-budget fund to be a success and for German infrastructure to make the big leap forward that everyone wants to see.