Betting On The Future. Large-Scale Projects .

Again and again, I have to think about whether or not S21 and the third runway at Munich Airport make sense.

The conclusions I come up with contain arguments I sadly miss when looking at the public discussions.

Here is my thesis:

A large-scale project is always a bet on the future.

Mind you, I do not object to bets. On the contrary. As I see it, they are absolutely necessary. Basically, every entrepreneurial decision relevant for the future is some sort of bet. One of the characteristics of being a good entrepreneur is that they invest, because they believe in certain future market developments. They bet on and work for what they believe in.

Looking at the two aforementioned (and several more) large-scale projects, I see two problems:
The high risk and the financing of the bet.

As to the risk, the question that comes to mind is:

What will our mobility be like five, ten, or even twenty years from now? Well, how about in 30 to 50 years?
Will it still be so dominantly individualized? Will we really still fly as much as we do now? Perhaps the trend will reverse towards going by bus or train? Will we, then, perhaps need huge coach stations? Or will we need more systems like the railway on the last mile? Will there still be enough water on the waterways – and will they therefore even be available for transportation? What about mobility when there is no more oil?

These and similar questions are to be answered in a reasonable way if you want to start infrastructural projects of this dimension in the traffic sector. After all, if something costs as much as those projects, it takes a lot of long and intensive utilization before they are even anywhere near profitable.

I do not know to what extend our mobility will change during the next 20 years or more. And I believe (or rather, I am afraid) that, given our current situation on this planet, no person and no future-research institute can realistically give any prognosis.

The reason why I get thoughtful is that I believe these bets on S21 and a third runway to be a lot more risky than, for instance, betting on a gas pipeline, a powerful German basic electricity network or (if you want an extreme example) the tunnel that connects England with France. In my opinion, this tunnel is a good thing, even if here, too, the betters ended up in bankruptcy (naturally!).

And the sum at stake for S21 and the new runway is terribly high. For S21, they now talk 5 billion Euros, but the experience with these kinds of projects shows that it will be a lot more expensive – even after deducing the inflation rate. Not to mention the nominal total cost.

To be sure, the third runway will cost “only“ one billion Euros. But to make up for it, we are sacrificing a lot of natural land for it. But even one billion invested Euros will have to be earned back. And the land might just turn into a rather precious commodity in the future.

As to financing:

Even when I was a child, I learned that you should only bet (the same is true for gambling on the stock market) if you have enough chips. And if you believe what the news and the numbers tell you, the times when this was true are past for good. There is no money available for things that have such high priority as education or the maintenance of the existing infra structure. But if I have no money, then I have to borrow money in order to bet.

That is risky. Taken together, it means:

We are travelling very risky paths on borrowed money!

And that is where I, as an insignificant director of a medium-sized company, have my reservations.

(Translated by EG)

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