German industry association ZVEI claims that high bureaucratic costs are a burden on the electric industry. According to the association’s president, Gunther Kegel, the effort to fulfill bureaucratic requirements binds enormous capacities, which are no longer available for the actual entrepreneurial activity. The companies, especially the mid-sized ones, have reached the breaking point, Kegel said in an interview with the Welt newspaper.
According to a survey conducted by the association, the financial burden of bureaucratic obligations on electric companies amounts to around six billion euros. This represents a three percent share of the industry’s turnover and, measured by the average profit margin, almost half of the companies’ annual profits. Three out of five companies in the survey reported being restricted in their innovation capabilities due to the bureaucratic burden. Moreover, nearly a quarter of the respondents said that planned investments in Germany or Europe had been halted.
The largest cost block is personnel, with an average of 16 employees per company being dedicated to external bureaucratic obligations, the survey shows. This translates to around 32,000 working hours per year and company.
The second-largest expense is consulting costs. “If more than three-quarters of the companies are no longer able to cope with the complexity of the requirements without external consulting and are unable to process them quantitatively, this shows the unbridled growth of information obligations” Kegel said. In addition, large sums are spent on software and IT to collect and provide the required data. Finally, there are costs for auditors, who must test the prepared reports.