A review of the major mistakes

So far, this chapter has covered the history of the planning and construction process of the BER Airport and the growing financial costs and envisaged capacity problems. The following discussion assesses some of the major mistakes and the reasons for them:'¹¹

• 1 Poor planning/Political interference: The 1996 location decision for SXF was problematic, because of the limited options for expansion at the BER site - that is, no third runway option, high noise protection costs and restricted night operations. The location decision was the result of political bargaining between the three stakeholders but mainly between Berlin and Brandenburg, subject to some subsidies for the transport links that in the end were not provided by the federal government.''² In addition, the state of Brandenburg had just rejected the proposed merger with the City of Berlin, further reducing Berlin’s willingness to cooperate on a location farther away⁶³ Clearly, such long-range technical infrastructure decisions should not be subject to short-term political influences.
• 2 Political interference: Short-term political considerations were equally problematic, as was shown most clearly by the move to multiple contracts. Breaking the project up into multiple lots in 2007 made it more complex and costlier and resulted in significant delays. The managing and controlling process for the new airport was thus compromised from the outset, as the FBB, under pressure by the regional governments of Berlin and Brandenburg, decided to parcel out jobs in smaller batches to ensure that regional firms could benefit from the airport works.¹’⁴ The management and the board prompted several costly changes in the usage of the airport, often under political pressure or reacting to demands from airport users. One of them was equipping the passenger terminal with double-decker flight bridges for the handling of the A-380 aircraft so that the BER Airport would become attractive as an international hub. This decision was a ‘purely political decision’ by the Supervisory Board, which was opposed by the then technical director, Weyer (Der Tagesspiegel, 2012b; Die Grünen, 2014). When the airport opening in 2012 had to be cancelled on short notice, limiting political damage by finding a scapegoat in the management and architects was the preferred option for the politicians that were leading the board rather than correcting the mistakes with the existing team and within the contractual framework.
• 3 ITcrtf execution capability: After the initial plan for privatisation via a BOT contract failed, moving the responsibility for the constructing of the airport to the FBB made it a complex task. ‘The megaproject BBI was “squeezed” into an existing corporate governance framework designed for a going concern’ (Wendler, 2015, p. 5) that was without such experience and with weak external and insufficient internal control. Having multiple contracts also increased the complexity of the project, especially with respect to the interface between related or similar tasks, so that this ‘interface problem’ remains with the project until the planned opening.“
• 4 Lack of experience and management expertise: There was a lack of experience in project management, inadequate competence and a lack of organisational structures for the implementation of a project of this scale and complexity. FBB management lacked specialist knowledge and resources (also its Supervisory Bodies). Defects in the internal control system and risk management were major causes for missing of deadlines and spiralling costs.

The Supervisory Board exerted pressure on the management and the companies involved in the project due to frequent changes in use and the associated changes in planning during the terminal construction. At the same time, they increased the pressure because they insisted on timely completion. But the management was also responsible for this dynamic, because despite the complications from the many design changes, they neither wanted to adjust their financial requirements upwards nor wanted to postpone the opening date. Instead, the management remained steadfast on the opening date on 3 June 2012 and ignored the warnings of project participants about the construction of the airport.

Rushing the construction efforts to meet the opening deadline in 2011/2012, the governance structure broke down completely, resulting in a chaotic situation that took years to undo. Only after the delayed opening in 2012 did the board also elevate the CFO to the management board. Until 2012, the internal controlling of FBB did not include checking the progress of construction, because general planning, site management and construction supervision and control were the responsibility of PG-BBI. Project controlling and project documentation were subject only to self-regulation.'''¹ Defects in the internal control system and risk management were major causes for missing deadlines and for rising costs.⁶⁷ Cost underestimation (also mentioned by Flyvbjerg et al., 2009) and time to completion were further important issues. Financial control was initially lacking. In addition, there was no preparation for dealing with problems like the smoke-extraction-system debacle. Politicians and the Supervisory Board often tried to save on planning and tendering. The quantification of the construction costs was often done too early and without reliable planning.

• 5 The role of state construction supervision: For major airport construction projects, the construction supervision by the relevant state authorities/“Bauordnungamt” has an important influence in guiding the construction process from the legal/regulatory perspective. In the case of the BER, the construction supervision was the responsibility of two civil servants at the rural District/Landkreis Dahme-Spreewald, who had little or no political influence with the state authorities and the airport. They acted purely as supervisors without articulating the observed risks in time. With a stronger political connection, as can be observed for example concerning the construction of the new Munich airport, they would have intervened much earlier, i.e. between 2010 and 2013, to stop undesirable developments. Unfortunately, this did not happen.
• 6 Problems in governance structure, conflict of interest and lack of qualified supervision: The FBB Board used to consist of 15 members. This included politicians (often high ranking) that changed frequently, civil servants, industry representatives (e.g. Berlin Chamber of Commerce) and trade unionists that monitored the FBB and thereby the BER project (Berliner Morgenpost, 2019). With government changes at the federal or state level, the board members would automatically change, so there was less continuity. At times, a state secretary would sit in on the shareholders’ meeting, which in their government position was supervised by their prime ministers on the Supervisory Board, so independent external control was not possible with these board members. Instead, the Supervisory Board would usually approve the proposals of the FBB executives without further questioning. Furthermore, the Supervisory Board lacked experience with respect to large-scale construction projects and lacked independent expertise (Der Tagessspiegel, 2016). In summary, they were poor managers and controllers."⁸

The State Accounting Office of Brandenburg/Landesrechnungshof therefore recommended that government representatives not be on the board and suggested that they instead nominate independent experts

A case study of airport construction 257 Landesrechnungshof Brandenburg (2015) and Der Tagesspiegel (2016).⁶⁹ The federal government recommended in 2014 that external controlling institutions be created for the FBB, reporting directly to the shareholder meeting, about progress in construction, cost and dates, but that recommendation was never implemented (Berliner Morgenpost, 2014). In addition, politicians, often rather late, had special requests, which led to cosdy changes in planning and construction.

• 7 Lack of proper project governance and no external contract supervision: Large and complex construction projects usually manage their construction activities by hiring contractors who have engineering and construction experience. In the case of BER, the project was not within a comprehensive governance framework when it was moved by the three owners to the FBB. The project was without a general contractor who would take over the technical and financial execution process, including handling subcontractors in an adequate manner (Bündnis 90/Die Grünen, 2016). The Reform Commission for the Construction of Large Projects of the German Transport Ministry set up in 2013 analysed ongoing project deficits, made proposals for solutions and issued a set of recommendations (Bundesministerium für Verkehr und digitale Infrastruktur/BMVI, 2015). The report States, ‘One of the most common causes of deficiencies was that the building owner and management competence did not meet the requirements and there was often a lack of clear rules regarding responsibilities and decision-making competencies and deadlines’, a conclusion that also fits the BER project. Hoffer (2018) reports similar experience in his analysis of public construction efforts in Austria as does Mott MacDonald (2002).
• 8 Ongoing changes in planning details and project dimensions during construction: It seems that the organisation was unable to manage the complexity and the long-range planning horizon of the project. The collaboration between FBB and PG-BBI, responsible for planning and construction, was characterised by significant ongoing changes in the planning details and dimensions of the project that led to higher cost and delays. Hundreds of more or less drastic changes, including terminal size and layout, increased project complexity and overburdened FBB management, which did not do enough to discourage change requests after the point at which a design had been agreed on but even commissioned construction before planning was completed. Not only was there an underestimation of the coordination complexity created by this policy, but it was exacerbated by the interaction between the various subprojects, in particular, the effect of one change on other tasks or subprojects, which led to further delays and rising costs. Risk management concerning such changes was missing.⁷" FBB was unable to move or force simple solutions on the contracted architects, who may have been more concerned about structural aesthetics than about the operational functionality of the terminal.⁷¹

9 Dysfunctional ownership: The governance structure with three owners was also problematic. The state of Berlin (37 per cent), the state of Brandenburg (also 37 per cent) and the German federal government (26 per cent), with different political objectives, were more influenced by pending elections and party coalition in each government than interested in achieving a coherent long-term plan. Differences in the three owners’/ political actors’ interests were therefore a major problem, as can be seen in the selection of senior personnel, after government changes following an election. The federal stake in FBB was reduced after reunification to 26 per cent, highlighting the lesser role that the federal government is playing at BER. It also illustrates the missing aviation strategy of the federal authority and the lack of willingness to take responsibility for strategic development in the aviation sector, as was seen in the ‘Konsensbeschluss’ decision about the location for the BBI/BER.⁷² Almost all the decisions regarding airport location in Germany are decided at the state level. This probably explains the insufficient attention given by the federal government to the BER issue and the failure to mobilise a higher level of expertise, which the two state governments were not able to provide. So perhaps a single owner or at least a dominant shareholder might have helped to avoid such problems.