(May 2012) Since the early 2000s public enterprise in Cologne, Germany's fourth largest City, has undergone a major transformation. This has seen the creation of the country's largest municipal services consortium and the return into public hands of key public services like waste management.
This is in stark contrast to the often flawed and corrupt privatisations, public-private partnerships and cross-border leasings that characterised the City's services in the 1990s.
The Stadtwerke Köln, (Cologne public enterprise) was founded over a hundred years ago and now serves one million inhabitants. Under the umbrella of KWS Stadtwerke Köln GmbH, established in 2002 as central public holding company, the city has assembled public service providers in water and waste water services, waste management, public transport, telecommunication, ports and railways, radio, public housing and baths.
Today, the Stadtwerke has 11000 employees and a turnover of €5.2 billion. This includes ownership of 80% of the electricity utility RheinEnergie AG, a public-private partnership with a 20% share owned by the private sector energy company RWE.
According to public service trade union ver.di, the Stadtwerke are remarkable for a number of reasons.
Profitably, efficiency and public service
Firstly, because of their economic success. They make an overall profit of €88 million, with a resulting transfer of €68 million into the budget of the city of Cologne in 2010. This provides a key income stream for the local authority at a time of declining income from local taxes, and growing expenditure and indebtedness.
Secondly, cross-subsidies within the public consortium itself re-direct earnings from profitable areas such as water and electricity into deficit sectors such as public transport, swimming pools and such like.
Thirdly, the Stadtwerke are exemplary for public service provision in a broader sense too. They balance economic efficiency, profitable growth and public welfare at the same time as securing good quality employment.
In its most recent annual report, the consortium’s management argue that the Stadtwerke Köln are pioneers in the recent discussions about the re-establishment of public utilities and the remunicipalisation of formerly privatised utilities. While layoffs have been very common in privatised and many public utilities, the Stadtwerke Köln have increased the number of employees by 3.5% compared to 2009.
Expansion
Alongside the commitment to municipal ownership and public sector ethos, the Stadtwerke is also expanding into a regional role, seeking new cross-shareholding arrangements and concessions outside of Cologne, partly to create more revenue for its municipal owners.
The Stadtwerke already hold investments in other municipal utilities, such as Stadtwerke Düsseldorf and the port company of Duisburg, as well as other private sector firms in the communication and energy sectors.
At national level, RheinEnergie AG has joined other medium sized municipal electricity utilities in setting up the national consortium 8KU. They aim to be a competitor to the national oligopoly of private companies –RWE and E.on.
For Cologne itself, RheinEnergie’s aim is to expand renewables to 50% by 2020 but it has also bought a 50% share of a lignite-fired power plant in Rostock in order to enlarge its in-house power production.
Some opposition
As a municipal entity, the Stadtwerke Köln is subject to scrutiny by neighbourhood organisations and political parties, for example through opposition to planned closures of public baths. And they have met with local opposition to take-overs of other cities’ Stadtwerke, ports and energy companies, where critics argue that the consortium implements an expansionist economic strategy that campaigners for remunicipalisation seek to avert.
But public ownership, within the constraints and incentives of the German market, does mean that the Stadtwerke Köln maintain their primary focus on local service provision. In addition, public scrutiny does occur via the corresponding elected political bodies, labour participation in the official boards and indeed citizen engagement.
Despite controversy over the cross-shareholdings in other municipal utilities, overall Cologne certainly presents a successful case of communal economic self-determination in a complex market situation.
Links
- Ver.di Cologne region website
- Cologne Stadtwerke website
- Cologne Stadtwerke annual report 2010
- Report from Die Linke on saving swimming pools in Cologne
- Article in Die Welt on the Stadtwerke challenge to the big energy companies
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