Issues Surrounding Decommunalization in Bremen: Study Adds Weight to Concerns
In the heart of Germany, the Chamber of Commerce and the Association of Enterprises in Bremen are ruffling some feathers with their stance on remunicipalization. The two groups have found themselves squaring off against city plans to take over hanseWasser Bremen GmbH and potentially other services like waste logistics and street cleaning.
The Senate had my heart fluttering with its proposal to run the waterworks as a fully municipal company, ditching the public-private partnership (PPP) model. With current contracts expiring in 2028, the city is facing a choice: renew the PPP or establish a municipal enterprise.
But the Chamber and the Association fear a decision made in haste, claiming there's been a void of factual information to guide the discussion. Enter the Prognos AG study, which aims to fill that knowledge gap with insights on the benefits and drawbacks of remunicipalization.
"Private actors have a strong incentive to work cost-efficiently, innovatively, and customer-oriented if they want to survive on the market," said President André Grobien at the study presentation in the Schütting House. Their doubts about remunicipalization were further confirmed by the study.
The Chamber and the Association made no content-related specifications for the study, eager to approach its findings with an open mind. They stressed the importance of making decisions based on facts and what's best for the companies in Bremen and its citizens.
The study found that the financial benefits of the construction of a public-private partnership (PFI) have been substantial, unlike a fully municipal organization, which has been characterized by steadily increasing fees and economic deficits, particularly in the case of municipally-run recycling centers.
Remunicipalization comes with the promise of better performance, decreasing fees, and increased city revenues. But the study's findings reveal a murky picture, as those supposed advantages are balanced against significant losses in trade tax, corporation tax, and capital gains tax revenues.
City leaders should think twice before embarking on the road to remunicipalization, cautions Dr. Matthias Fonger, CEO of the Bremen Chamber of Commerce. He emphasizes that the performance in water treatment and waste logistics is generally satisfactory, and any changes should be based on a well-considered and data-driven basis.
In the end, the city of Bremen needs to clarify its objectives and ensure careful consideration before making a move that could potentially endanger a well-functioning organizational form and lead to increased costs for both citizens and companies. It's crucial to put facts over ideology when making such decisions.
- The Chamber of Commerce and the Association of Enterprises in Bremen, in conjunction with the finance, politics, and general-news sectors, are expressing concerns about the city's potential remunicipalization of services like hanseWasser Bremen GmbH, waste logistics, and street cleaning.
- During a presentation at the Schütting House, President André Grobien of the Chamber and the Association stated that private actors in the industry have a strong incentive to work cost-efficiently, innovatively, and customer-oriented to survive in the market. The study commissioned by the Chamber and the Association further confirmed their doubts about remunicipalization.
- The Prognos AG study, which focused on the benefits and drawbacks of remunicipalization, found that while the promise of better performance, decreasing fees, and increased city revenues exists, it is balanced against potential losses in trade tax, corporation tax, and capital gains tax revenues for the city of Bremen. City leaders are advised to ensure careful consideration before making a move that could potentially endanger a well-functioning organizational form and lead to increased costs for both citizens and companies, emphasizing the importance of basing decisions on facts rather than ideology.
