Delays in all constructions are costly. But in Denmark's largest construction project in history, time becomes so expensive that it is almost impossible to comprehend the scale.
When it comes to years and not months, millions become billions. Euros. The first tunnel element was supposed to be placed at the bottom of the Fehmarn Belt at the beginning of 2024. Today, one still has to search long for a single element in the tunnel trench, that is, the 18-kilometre excavated trench on the seabed where the elements are to lie, while the completed elements are queued in and around the work harbour on Lolland. Something has gone wrong. The question is what, who is to blame, and who will ultimately foot the bill?
This is precisely why there is a battle over the explanation for the delays. Is it about the special vessel Ivy being delayed? Or is Ivy actually less important because the entire foundation for the construction, the tunnel trench, is not ready for use?
Who should pay?
For the client, which is the Danish state with Sund & Bælt and Femern A/S under it, the statements are primarily about the Ivy vessel. Very little is said about the tunnel trench. The reason is simple: The fact that Ivy is not yet ready is the main contractor Femern Link Contractors' problem, and thus also the contractor's responsibility. It is the international contractor consortium that is to build the tunnel and receives around 30 billion DKK for that part of the task.
Everything is detailed in a contract. There may be penalties for delays, but the schedules also include buffers that allow for minor adjustments. However, a delay caused by vessels that FLC itself has developed and ordered is difficult to blame on others. In the end, it can cost the contractor dearly.
But what if the problem is different? What if the tunnel trench does not meet the requirements at all?
The tunnel trench has been excavated by the Dutch consortium Femern Belt Contractors and has been handed over to the client Femern A/S. When the client takes over and pays, it is practically also an approval of the delivery. But since spring, FLC has said that they will not approve the trench and therefore will not take it over. According to the contractor, there are too many errors and deficiencies. If FLC is right that the trench does not meet the requirements, the responsibility shifts abruptly away from the contractor's vessels and onto the Danish state. And the quality of the tunnel trench is currently something that the client is negotiating with FLC about, and therefore no one is willing to comment on the matter.
This is one delay. The other shows how expensive time can become on the Femern construction project.
What does a month's delay cost?
When the contracts for the enormous projects were signed in 2016, not all conditions were known. The German environmental requirements for how work can be conducted on the Fehmarn Belt were the big unknown, and they impact the project's most time-sensitive process of all: the immersion of tunnel elements.
The German requirements are strict. According to FLC, they make it impossible to maintain the pace originally expected. The plan was to complete the immersion in 36 months. This cannot be achieved if the environmental requirements mean stops, restrictions, and lower efficiency during periods when the weather otherwise provides the best working conditions. Here, FLC believes that the requirements could trigger a delay of around 20 months, and the cost for this amounts to 14.5 billion DKK. This corresponds to approximately 725 million DKK per month.
According to the contractor, compensation concerns conditions they could not have foreseen and therefore were not included in the bid. In legal terms, it is a matter of contract adjustment due to changed conditions.
38 months
Both delays are real. The unpleasant part is that they do not overlap. A simple calculation therefore points to at least 38 months of delay. With the main contractor's own pricing of time, this can very quickly become a double-digit billion amount.
There are actually two conflicts. One is about what specifically stops the immersion here and now: Ivy or the tunnel trench. If it is Ivy, the responsibility points to the contractor. If it is the trench, it points to the client. The other conflict is not about the next element, but about the entire pace of the immersion. Here the question becomes whether the German environmental requirements are something the contractor should have accounted for, or if it is a changed condition that can trigger compensation.
The Fehmarn connection thus joins a well-known series of public megaprojects, where disagreement over extra bills threatens to become as dominant as concrete, steel, and machinery. The difference is that the scale of the Fehmarn construction is larger, and the consequences can be correspondingly more severe.
Vinci versus the state
For the contractor consortium led by French Vinci, there is a lot at stake directly and financially. Vinci is a global construction group, where even large billion amounts can normally be absorbed. But a loss on a prestige project like Fehmarn will hurt both economically and strategically.
For the Danish state, the calculation is more indirect, but not necessarily less important. The project is financed with state-guaranteed loans, which over time must be repaid by the users. Initially, it is therefore not a question of an acute bill on the finance act. But larger demands and longer construction time can mean more expensive financing, longer repayment time, and ultimately a political question of what it should cost to drive through the tunnel. And what are tourists, commuters, and hauliers willing to pay for 18 kilometres under the Fehmarn Belt?
The Fehmarn connection right now resembles a megaproject in the dangerous phase: technical delays turn into financial demands, and financial demands turn into a battle over responsibility. Once the project reaches that point, the question is no longer just when the first tunnel element will reach the seabed. The question is who will pay for it not happening in 2024 and that the connection is now set to be delayed by several years.
