(Releads with confirmation, adds details)
By Gernot Heller
BERLIN, March 27 Germany has ditched plans to
build a flagship high-speed rail link between the Bavarian
capital Munich and its airport because of ballooning costs,
Transport Minister Wolfgang Tiefensee said on Thursday.
The Transrapid, one of the world's fastest trains, was
developed by German engineers at Siemens AG (SIEGn.DE) and
ThyssenKrupp AG (TKAG.DE) and so far the technology has only
been used commercially in China.
Tiefensee told a news conference that industry estimated the
cost of building the link would reach 3.2 billion to ($5.76
billion) 3.4 billion euros compared to the 1.85 billion euros
orginally earmarked for it.
"The Munich magnetic levitation rail project has collapsed,"
Tiefensee told reporters.
The federal government had originally pledged to assume up
to 925 million euros in costs and the state of Bavaria around
Construction company Hochtief (HOTG.DE) had been leading the
consortium. National rail operator Deutsche Bahn AG [DBN.UL],
Munich airport and the European Union were also involved, as
well as Munich-based Siemens and ThyssenKrupp.
The project was announced last year by then Bavarian premier
Edmund Stoiber just days before he stood down as head of the
southern state's conservative party.
Critics said it was a pet project of his which he wanted as
a personal legacy despite fierce criticism from local residents
and the Munich mayor. The costs had soared mainly due to the
costs of the track, said industry sources.
Bavaria's plans for the Transrapid, which set a speed record
of 450 kph in 1993, had offered hope for the technology which
has enjoyed little commercial success.
Despite a string of proposals for its use across the world,
the only train of its kind in commercial use is a shuttle from
the centre of the Chinese city of Shanghai to its airport.
Travelling at three times the speed of normal steel-wheel
trains, the "mag-lev" Transrapid floats on a magnetic cushion
one centimetre above the track. It has no fuel source on board
and its makers say it cannot derail.
Industry groups in Germany, Europe's biggest economy and the
world's biggest exporter, bemoaned the decision.
"That is not a good signal for Germany as a location," said
Heinrich Hoefer, technology expert at Germany's BDI industry
Another plan to build a Transrapid link between Hamburg and
Berlin has already been scrapped.
A Transrapid train crashed on a test run in northern Germany
in 2006, killing 23 people, an accident in which investigators
said human error was to blame.
Siemens Chief Executive Peter Loescher said the company was
in talks with several other possible global partners who might
be interested in the Transrapid project.
At 1048 GMT, Siemens shares were up 1.38 percent roughly in
line with the leading German DAX .GDAXI index and ThyssenKrupp
shares were up 2.31 percent.
(Reporting by Gernot Heller and Jens Hack; Writing by Dave
Graham and Madeline Chambers; Editing by David Holmes/Elaine