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  • Dear Readers!

    There is good cause for celebration! 30 years of a unified Germany. Or perhaps we should say: ‘30 years of working on a unified Germany’? Seen from a historical perspective, it is certainly true to say that the reunification process has not yet been completed. In fact, looking at Germany’s history, you might well be excused for thinking that this process will never be completed. Each individual region has its own cultural peculiarities, its own dialect, its own sensibilities, its own breed of people. And, of course, their traditional dishes are worlds apart from each other. But that’s the way it should be as it is the differences that create a strong dynamic for change and enrich our culture and economy. Having said all that, we are still quite a young nation. Germany really hasn’t been around that long. Our country – as a federation of states – did not come into being until almost 100 years after the United States of America was founded. And we are all well aware that they are still working hard on unifying their nation.

    We are very grateful that our family-run business has been able to play a constructive role in shaping the reunification process from the start. While criticism continues to be directed towards the Treuhand (the agency responsible for privatising the former East German enterprises) for the way it acted – its focus was often on processing rather than developing – our aim has always been on finding robust, future-oriented solutions by working closely on the ground with the different city and regional authorities. The results speak for themselves – whether it be in the Lausitz region where our public private joint venture WAL Betrieb provides water management services and has kept fees and charges stable and jobs secure for decades now despite the region’s declining population; or in Schwerin, where the public private partnership between the city and REMONDIS has been hugely successful at delivering key services cost effectively. And these are just two examples of many. It was – and continues to be – the amazing personal dedication of the company’s employees in the regions that made it possible for REMONDIS to become a local east German family-run business in these new areas after the wall fell. What’s more, some of the family moved from the Westphalian town of Selm to make their home in Mecklenburg-Vorpommern – but this just as a side note. Unity requires active commitment, as does sustainable development. REMONDIS is dedicated to both, always working with the future in mind.

    One thing is certain: there are a lot of things still – or once again – to be done. The recession brought on by Covid-19 is having a dramatic impact on the finances of local authorities. According to the Federal Statistical Office, the cities and districts faced a shortfall of 9.7 billion euros in the first six months of this year. As a comparison: the deficit amounted to just 0.3 billion euros a year ago. The reason for this negative trend was the drastic fall in revenue received by local governments in the second quarter of 2020. The German economy nosedived by 9.7% between April and June – the first time it has ever had to face such a huge drop. Yet another reason then for thinking about how the pressure can be taken off local governments in the future. They don’t have to do everything by themselves – the private sector is happy to help. Public private partnerships are a robust solution for delivering cost-intensive essential services, such as waste management and water management tasks. I and Professor Michael Schäfer, retired professor of public sector economics at the Eberswalde University for Sustainable Development, illustrate this very clearly with the help of many examples in one of the books we co-authored – and we don’t forget to mention the negative examples either. As everyone knows, people learn from their mistakes so they can do a better job in the future. And this is precisely what we are doing together with our friends and partners in the not so new states in the east of Germany, in Europe and across the world.

    We hope you enjoy reading this latest issue. Stay safe!

    Yours

    Ludger Rethmann

A difficult time – for local authorities as well

The coronavirus pandemic has not only had a negative impact on industrial businesses and SMEs. Local authorities are also finding themselves under huge financial pressure. They are having to perform a juggling act at the moment with their business tax revenue having plummeted by up to 70% and their costs continuing to rise as they try to overcome the crisis. Ludger Rethmann, REMONDIS board chairman and vice-president of the Transdev Group, and Prof. Michael Schäfer, retired professor of public sector economics at the Eberswalde University for Sustainable Development, travelled to Berlin recently to meet with other high-profile guests and take part in a panel discussion held under the aegis of Dr Reiner Haseloff, minister president of the German state of Saxony-Anhalt. The subject: how best to deliver key services in the future.

Rethinking PPPs

  • Public private partnerships (PPPs) are by no means obsolete nowadays. They are just looked at from too narrow a perspective. This is at least the opinion of the two authors, Prof. Michael Schäfer and Ludger Rethmann, who have had two books published by SpringerGabler this year: ‘Öffentlich-Private Partnerschaften. Auslaufmodell oder eine Strategie für kommunale Daseinsvorsorge? ’ [Public private partnerships. A discontinued model or a strategy for providing essential public services?] and ‘Öffentlich-Private Daseinsvorsorge (ÖPD) in Deutschland. Gemischtwirtschaftliche Unternehmen auf kommunaler Ebene als strategischer Erfolgsfaktor’ [PPPs dedicated to providing key services in Germany. Public-private joint ventures at local authority level as a strategic success factor]. In both these books, they provide plenty of facts to show how, over the past few years, both the media and the scientific community have primarily focused their attention on PPPs involved in infrastructure projects. While there have been a few successful projects in this area, this segment has had more than its fair share of scandals, fraudulent dealings and poor performances, all of which tend to make it into the headlines.

    • (from left to right) Ludger Rethmann, REMONDIS Board Chairman and Vice President of the Transdev Group, Dr Reiner Haseloff, Minister President of the state of Saxony-Anhalt, and Prof. Michael Schäfer, Professor of Public Sector Economics

A diverse range of successful case studies

In contrast, both authors focus on the myriad of long-standing successful collaborations that are dedicated to delivering essential public services. These are primarily municipal companies, which have sold a share of their business to a private sector partner with high levels of expertise. These PPP companies, which are normally majority owned by the local authority, do not make the headlines because they generally work smoothly, are structured to run over a long period of time and benefit both parties. As far as both authors are concerned, one thing is certain: it will be practically impossible for compartmentalised, local structures to overcome the upcoming challenges on their own – whether it involves demography, digitisation, sustainability or infrastructure. Local authorities need to work with partners. The authors’ fact-based conclusion: “There are indeed top PPP companies. Joint ventures set up between the public and private sectors to deliver essential public services have become the norm when the parties work together closely and sensibly”.

  • Order a copy of Ludger Rethmann and Prof. Michael Schäfer’s book online 

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