Legal battles over the financing of Stuttgart’s station redevelopment have shown no sign of abatement, with Deutsche Bahn (DB) ready to appeal against this week’s ruling of Stuttgart Administrative Court.
The decision meant the national rail provider would be held responsible for the $7.5bn overspend on the $12.32bn Stuttgart 21 project.
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The 2009 joint venture agreement that set up the massive redevelopment of the major station included a financing agreement between the German federal government, the state of Baden-Württemberg, the state capital of Stuttgart, Verband Region Stuttgart (the political entity of the Stuttgart region), Stuttgart Airport and Deutsche Bahn.
This group, known as Project Partners Stuttgart 21, has successfully argued that it is not liable for the overspend thanks to the fixed-cost terms of the project contract.
Legal representatives for the state of Baden-Württemberg explained that a “negotiation clause” did not require the Partners to increase its spending.
“The court has clearly confirmed that Deutsche Bahn, as project sponsor, is solely responsible for the additional costs of the S21 project,” said White & Case partner Henning Berger, who led the representation of Baden-Württemberg in court.
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By GlobalData“The negotiation clause does not automatically lead to an adjustment of the contract and consequently it does not oblige the state to increase its subsidies,” he said.
White & Case added that its client had made its “cost ceiling” clear to DB in 2011.
“The state government decided in 2011 that it would refuse to contribute to any additional costs above the agreed €4.5bn ($4.9bn) cost ceiling and informed Deutsche Bahn of this at an early stage.”
But that didn’t stop DB bringing initial legal action in 2016 to contest the payment dispute.
Even before the latest court ruling, Germany’s rail company said it would contest any unfavourable opinion. And after the judge returned their view, DB hinted heavily at continued legal action to share “joint financing responsibility”.
“DB is still of the opinion that the project partners must contribute to financing the additional costs of the Stuttgart 21 project,” the company stated.
“Due to the history of the project’s origins, the financing negotiations and the contractual provisions regarding joint project responsibility, DB assumes that there is also joint financing responsibility.”
