Accusations swirl in fallout over Transrapid demise

By Christiaan Hetzner

FRANKFURT, March 31 (Reuters) - The abrupt demise of Germany's first commercial Transrapid maglev train route has sent all parties involved scurrying to avoid responsibility for the political fallout.

The prestige project designed to link downtown Munich, the country's third-largest city, with nearby Franz Josef Strauss Airport was meant to showcase German engineering prowess.

The magnetic levitation train link that would have carried passengers at speeds of over 400 kilometers an hour was scrapped after costs rose to more than 3 billion euros ($4.73 billion), from 1.85 billion anticipated in 2005.

Now all participants in the project are hurrying to deny responsibility for the project's failure, which has all but ended hopes of finding wide-spread commercial use for the technology developed by ThyssenKrupp (TKAG.DE: Quote, Profile, Research, Stock Buzz) and Siemens (SIEGn.DE: Quote, Profile, Research, Stock Buzz).

The German government and the state of Bavaria, due to foot the lion's share of the bill, blame a 1.5 billion euro spike in the realisation costs that arose in just the past six months.

Building group Hochtief (HOTG.DE: Quote, Profile, Research, Stock Buzz) said it had nothing to do with the earlier estimate, originally stemming from a government feasibility study based on prices from 2004, and pointed to expensive legal requirements imposed by the authorities to protect quality of life among local inhabitants affected by the new train.

The longer than anticipated construction time and a sharp increase in costs of raw materials such as cement, steel, copper, oil as well as labour since 2004 led to the ballooning costs, it said.

Bavarian construction industry boss Gerhard Hess said German railway operator Deutsche Bahn on Friday was the guilty party, accusing it of signing off on an unrealistic estimate in September.