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F model

Since the adoption of the Fernstraßenbauprivatfinanzierungsgesetz (FStrPrivFinG - German Act on Private Financing for Transport Infrastructure) in 1994, "Special constructions" - bridges, tunnels and passes - can, in the course of federal highways or multiplelane national roads be built, maintained operated and financed privately. A private partner is granted the concession to operate the special construction or section of a national road for a certain period of time (usually 30 years).

With the F model, the private partner refinances expenses by collecting a toll from the user. This toll rate requires approval by state authorities. Additionally, the Federal Government can support the project with initial funding (start-up financing).

The benefits of the F model include:

  • Early implementation of measures in the federal highways sector.
  • Budgetary discharge by funding through user fees.
  • Easing the burden on public authorities with regards to operation and maintenance
  • Full user financing because light goods vehicles and passenger vehicles also pay a project specific toll.

So far, two projects have been realised, the Warnowtunnel in Rostock (opened in 2003) and the Herrentunnel in Lübeck (opened in 2005). Another project, the new Strelasund crossing to connect the island of Rügen to the mainland was put out to tender. However, the tender was suspended because no verifiable and eligible offer was received. The Strelasundbrücke was then realised conventionally and was opened to traffic at the end of 2007.

Together with consultants who participated in the projects, VIFG prepared an assessment for the Ministry of Transport within the scope of the evaluation of the F models (the progress report and other documents can be downloaded in the download section). The analysis showed that the expectations of the three previously projects put out to tender had not been fulfilled. The small number of projects and their economic development can be attributed to the following reasons:

  • There is a low toll acceptance among users and the projected traffic volumes were too high.
  • Central risks - in respect to traffic volumes and construction ground - are largely borne by the private partner.
  • The scope of the Fernstraßenbauprivatfinanzierungsgesetz (FStrPrivFinG - German Act on Private Financing for Transport Infrastructure is not exploited with regards to project development and structuring.
  • Suitability and sustainability criteria were not sufficiently taken into account in selecting projects and project development. However, the F model seemed to offer an opportunity to realise projects that could not be financed by conventional means.
  • The refinancing is fraught with uncertainties. The toll amount previously could not be based on known standards and the previous toll setting processes have proven to be extremely complex.

Accordingly, the full potential of the existing scopes in the Fernstraßenbauprivatfinanzierungsgesetz (FStrPrivFinG - German Act on Private Financing for Transport Infrastructure for an individually optimal project structure was not close to being achieved in previous projects. Essential economic and legal parameters shall therefore
be differentiated much stronger than before in future projects. A flexible application of the F model is possible for example within the following scopes:

  • A longer concession period eases the burden on the refinancing structure, enables lower toll rates and thus increases users' toll acceptance.
  • The integration of additional remuneration elements, for example with an availability character, can reduce the traffic volume risks.
  • A start-up is flexibly available, for example to lower the traffic volume risk in the early stages through a guaranteed minimum income.
  • Additional incentives for the private sector to realise efficiency potentials can also lead to a better acceptance of the F model in the public perception.

The F model, in its specific basic structure, remains a useful alternative for public procurement. The implementation of additional projects using the F model continues to be discussed with projects such as the Albaufstieg in Baden-Wuerttemberg or the Weser crossing in Bremen.