This is how politics works in Berlin. In December 2011, the Senate initiated “proceedings for the transfer of the right of use to the gas network in the State of Berlin”. A good nine years later, the proceedings are moving towards a new high point: on 9 March, the Federal Court of Justice will consider the concession for the gas network. And the legal hook and eye will then continue. Unless the state of Berlin buys Gasag, which was privatized in 1998. Politicians have put the dispute over gas and electricity concessions into an endless legal loop, from which the Senate is now trying to buy billions.
The most lucrative networks in Germany
Berlin’s energy networks are the largest and most valuable in Germany. With the sale of Bewag in 1997 for almost three billion D-Mark brands, the electricity and heat lines also became the property of the Swedish state-owned company Vattenfall. The gas network is owned by Gasag, which in turn is owned by Eon, Vattenfall and the French Engie. If Financial Senator Matthias Kollatz (SPD) offers enough, about 1.5 billion euros are being negotiated, then the Berlin gas supplier could become a state-owned company again.
The goal is to re-communicate
Under the banner of remigitalization, Berlin politicians are trying to correct the privatizations of the 1990s. The first major attempt was made by Finance Senator Ulrich Nussbaum (independent) when the body responsible for awarding concessions in the financial administration of the state-owned Berlin Energie – which was also anchored in financial administration at the time – awarded the gas network and the previous Gasag concessionaire was the subject. Since then, there have been quarrels in court and lawyers have made a lot of money. The state of Berlin spends millions on a never-ending legal battle. And not only in the dispute with Gasage, but also in the dispute with Vattenfall over the electricity network license.
Vattenfall lost interest
Government Mayor Michael Müller (SPD) and Kollatz presented themselves as winners and remasterists in October with foresight when they showed a surprise in the energy industry: Vattenfall is no longer interested in the Berlin hangover and is offering the state a power grid for sale. Müller spoke of “very good news for our city” and “another step forward in the strategy of remospitalization.” The governor praised the financial senator and praised Müller for the tenacity and negotiating skills of the “Platform” created for nationalization. Now the platform can finally be used in the energy network.
April 7, 2020, Berlin: Matthias Kollatz (SPD, l), financial senator in Berlin, and Michael Müller (SPD), ruler of Berlin … Photo: dpa
Berlin Energie, for years something more than a mailbox company, was denied the opportunity to go to court in a concession dispute with Gasag. That was history, Kollatz said. “Unlike in the past, Berlin can run such companies economically,” the finance senator said, referring to a subsidiary Vattenfall Stromnetz Berlin GmbH with 1,300 employees, which the Senate would like to take over with the network. If it works? When the electricity grid was negotiated before the Berlin District Court in 2019, the President of the Senate said that the state of Berlin was such an unfortunate employer that a voluntary transfer of people in the grid could not be expected.
Berlin “chicken pile”
The head of Vattenfall in Stockholm has decided to sell the network to end the “chaotic situation” that has culminated since the concession was granted in March 2019. “Take the money and run away” – this is Vattenfall’s motto. The parties would like to agree on the price with the help of an expert. In October, Kollatz announced that the agreement would be finalized in early 2021. However, there is a bigger gap between words and Acts in Berlin than in any other major German city.
First the power grid, then Gasag
There is talk of a “hen pile” in the energy industry, a “chaotic and overwhelmed administration” that is barely able to handle the billion-dollar deal with Vattenfall. The value of the energy network that Kollatz wants to acquire on the capital market with a state-guaranteed loan is estimated at around two billion euros. According to the model, it also intends to buy Gasag, ie the whole company, not only the Berlin gas network, as was the case a few years ago. The shareholder of Gasag Vattenfall will negotiate the sale of his shares only after the electricity network has been sold. And then it depends on the price. It is not yet known that the financial senator, who wants to join Gasag for more than five years, had an award report prepared.
It is also a network in Brandenburg
Gasag is a small group that produces and sells energy and operates networks in Berlin and Brandenburg. “Assets” are networks. Netzgesellschaft Berlin-Brandenburg, a subsidiary of Gasag, takes care of more than 14,000 kilometers of pipelines leading to 346,000 houses in which 775,000 gas meters are installed. The value of the Berlin gas network is estimated at around 1.2 billion euros. In addition, there is EMB infrastructure in the west (worth a good € 200 million) and Spreegas in the east of Brandenburg, which is around € 100 million. If the Berlin Senate wants to take over Gasaga completely and no other option is currently available, approximately 1.5 billion euros will be due.
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Eon and Vattenfall are willing to sell, the French Engie hesitates. Gasag is the largest French holding company in the Federal Republic – they are reluctant to give it up. If the price is not correct.
In early March before the Federal Court of Justice
Nothing is likely to happen before the Federal Court of Justice deals with the Berlin gas network on 9 March. In 2019, the Supreme Regional Court rejected the appeal of both the state and Gasag against the first-instance judgment of the Berlin Regional Court of December 2014 and did not allow an appeal to the Federal Court of Justice. Gasag, on the other hand, has successfully lodged a complaint, so the Supreme Court is now dealing with unfair intentions in Berlin. According to Gasag’s calculation, BGH would not have done so if it had nothing to complain about in the proceedings. In short: Gasag owners are betting on victory, which in turn will increase the price of their Gasag shares.
And in the election year. In Berlin, there are energy agencies, Stadtwerk and Berliner Energie as state-owned companies. What does not exist is a convincing energy policy. But maybe it will come when the electricity grid and Gasag are also part of the portfolio. In any senate.