Construction companies in eastern Germany suffer from increasing bureaucracy

Construction companies in eastern Germany are complaining about the increasing burden of bureaucracy. This goes so far that companies are refraining from participating in tenders because they shy away from the bureaucratic burden, according to the Construction Industry Association East (BIVO). The association summarized the results of a survey on the bureaucratic burden in a "black book".

According to this, 60 percent of companies stated that they did not take part in tenders because the bureaucratic hurdles were too high for them. BIVO Managing Director Robert Momberg called this alarming. "In times of housing shortages and ailing infrastructure, this shows that bureaucracy not only blocks projects, but also leaves urgently needed construction capacity unused."

No company sees a decline

93 percent of companies believe that the bureaucratic burden has continued to increase over the past five years. In a "black book" from 2018, the figure was 82.4 percent. Not a single company stated then or now that they had noticed a decrease.

"The second edition of our black book on the bureaucratic burden once again illustrates the extent to which tasks and obligations outside of the actual construction process are paralyzing the industry and making construction more expensive," explained Momberg. The so-called compliance costs that eastern German construction companies had to pay to deal with bureaucratic tasks amounted to 3.5 billion euros last year.

Association calls for simplifications

The association proposed measures to relieve the industry back in 2018 under the motto "3V - Reduce, Simplify, Connect". There should be fewer approval procedures in general and they should be simplified. Information should be made available online, uniform statistics are needed and harmonization at EU level. Digitalization in the authorities is also very important.

"The fact that these demands remain unchanged in 2024 casts a critical light on the political measures taken to date to reduce bureaucracy. Concrete improvements have failed to materialize: The number of regulations and the costs of implementing them have increased - despite numerous declarations of intent, task forces and red tape reduction laws," explained Momberg. It has long been known which steps are necessary to reduce bureaucracy, but there is a lack of implementation.

For the "Black Book", the association surveyed its member companies in the first and second quarters of this year. The Construction Industry Association East represents the interests of 260 construction companies with around 20,000 employees in Berlin, Brandenburg, Saxony and Saxony-Anhalt.