Plans for a high-speed “Transrapid” magnetic levitation train linking the Bavarian city of Munich to its airport were abandoned just seven months after receiving the green light, after construction costs almost doubled from €1.85bn to about €3.4bn, according to Wolfgang Tiefensee, transport minister.

The news is a setback for the engineering companies involved in the project. Peter Löscher, Siemens chief executive, said he “regretted” the decision. Deutsche Bahn, the state-owned rail company that is also involved in the project, said it was “surprised and disappointed”.

Siemens this month partly blamed a profits warning on problems with the Trans-rapid, raising concerns on Thursday that there might be other warnings in future.

Background

* Magnetic levitation, or maglev, trains run up to three times the speed of normal steel-wheel trains, and float on a magnetic cushion of one centimetre above the track.

* The only maglev train in commercial use is a shuttle from the centre of Shanghai, China’s financial capital, to its airport.

* Besides struggling Transrapid in Germany, Japan is the only country seriously pursuing maglev technology.

* Japan Central Railway announced last year that it planned to introduce the technology on a long-distance line by 2025.

German business has been lobbying since the 1980s to build a Transrapid train link in Munich or in other German locations, seeing maglev as a cutting edge technology to open new export markets. Thursday’s decision is likely to mark the end of such ambitions for a project in Germany, experts said. The only maglev train in commercial use is a shuttle from the centre of Shanghai, China's financial capital, to its airport.

German companies were among the pioneers behind the “maglev” technology but have failed in several bids to apply it in their own country. An accident in 2006 at a German maglev test track that killed 23 people was an additional setback. The technology spokesman for the BDI industry federation said Thursday’s decision was “not a good signal” for Germany to be sending.

The federal government had pledged to pay half the construction costs up to a maximum of €925m for the 40km Munich train link that, upon completion in2014, would have cut journey times from 45 to 10 minutes.

However, Berlin baulked at re-quests to contribute an extra €1bn when the cost over-runs became clear, officials said. The project’s collapse is also a severe setback for Bavaria’s conservative government, which had strongly backed the Transrapid. A weakening of support for the Christian Social Union, Bavaria’s ruling party, would be worrying for Angela Merkel, who is relying on CSU voters for re-election as chancellor next year.

The CSU, which has already lost votes in local elections this month, could now face another drop in support in state elections in September. Günther Beckstein, Bavarian premier and a top CSU politician, said the Transrapid decision marked a “bad day for Germany as an industrial investment location”. The Social Democrats, Ms Merkel’s coalition allies in Berlin but in opposition in Bavaria, said the decision was “the biggest possible embarrassment for the Bavarian government”.

Edmund Stoiber, the former Bavarian premier who championed the landmark project before leaving office, joined other politicians in criticising the companies involved for the rapid cost increase.

“A near doubling of the costs in six months is very unusual” Mr Stoiber said. In response, Siemens and ThyssenKrupp, the steel group that was also a member of the project consortium, said they had held to their original cost plans, and indirectly blamed Hochtief, the main construction company involved, for the problem.

A Hochtief spokesman denied responsibility, saying it had not been involved in making the original cost estimates.

Both the government and Siemens said Germany would continue to promote maglev technology and seek customers in international markets such as the Middle East and the US.

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Germany Scraps Transrapid Rail Plans

Deutsche Welle: 27.03.2008

Photomontage of Transrapid against Munich background: This is what Edmund Stoiber dreamt of for Munich

The German government has scrapped plans to build a prestigious high-speed rail link between the Bavarian capital of Munich and its airport because of a massive overrun in costs.

Transportation Minister Wolfgang Tiefensee announced the decision after a crisis meeting in Berlin on Thursday, March 27, at which industry representatives reportedly revealed that costs had risen from 1.85 billion euros ($2.9 billion) to well over 3 billion euros.

"The federal government is not prepared to increase its contribution," Tiefensee said. "We had to conclude that it is not possible to finance this project."

Death knell for mag-lev technology

A Chinese station worker helps a passenger in Shanghai

Industry observers say that without a showcase project in Germany for one of the world's fastest trains, the technology devised by engineers at Siemens and ThyssenKrupp is unlikely to have much success abroad.

The Transrapid technology has currently only been used commercially in China. Another plan to build a magnetic-levitation monorail link between Hamburg and Berlin has already been scrapped. A crash that led to 23 deaths on a test stretch in 2006 was caused by human error, but it was clearly a severe PR setback for Transrapid.

Mutual blame game for the failure of the project

The crash in Lathen im Emsland was blamed on a human error

The firms involved in the Munich project have blamed each other for the runaway costs. Siemens CEO Peter Loescher indirectly attributed it to construction industry partners Hochtief, saying that his company and ThyssenKrupp had kept to the guidelines. Thyssenkrupp officials said they were not "responsible" for Hochtief's figures.

Hochtief rebutted these accusations, saying it had not been involved in the 2004 estimate.

"This is the first time that we have had a proper overview of the cost situation," a company spokesman said.

He added that the company had ascertained that it was not possible to implement the project for 1.85 billion euros.

The German government had agreed to bear half the cost for the train line, but up to a maximum of 925 million euros. The state of Bavaria had earmarked 500 million euros -- with German state railways Deutsche Bahn, the airport, the European Union and the two companies involved making up the remainder.

Bavaria's pride and joy

The new Bavarian state premier said he did his best to keep the project on track

The project was announced last year by then Bavarian Premier Edmund Stoiber just before he stood down as head of the southern state's conservative party in September and many observers saw it as a "parting present" from Angela Merkel's Christian Democrats to the CSU, the CDU's Bavarian sister party.

Bavarian Premier Guenter Beckstein said he had lobbied hard to persuade the federal government to increase its contribution, but to no avail.

"This is a bad day for Germany's image as the home of high-tech industry," Beckstein said.

The Transrapid project would have trimmed the current 40 minute journey from Munich to the airport down to 10 minutes -- and had been billed by many as a coup for the prosperous southern German city.