The first cars will not be able to drive through the Fehmarnbelt tunnel until 2032 at the earliest. At the same time, the outlook for rail traffic through the tunnel remains uncertain, and the bill for the largest construction project in Danish history continues to grow.
That is the new reality facing the Fehmarnbelt project, as Mikkel Hemmingsen, CEO of Sund & Bælt, now describes it in an interview with Børsen.
The opening has been pushed back because the most critical phase of construction has only just begun. On Thursday, the first of 89 tunnel elements was immersed in the Fehmarnbelt. The element is 217 metres long, weighs more than 73,500 tonnes and forms the first section of the 18-kilometre tunnel between Lolland and the German island of Fehmarn.
The remaining elements still have to be cast, transported to sea and lowered into the tunnel trench before installation work, testing and the final preparations can be completed.
That makes time one of the most expensive factors in the project. The longer construction continues, the longer the factory in Rødbyhavn, the vessels at sea, the workforce and the technical systems must remain in operation. At the same time, the date when the link can begin generating traffic revenue is pushed further into the future.
The budget is rising
Mikkel Hemmingsen confirms to Børsen that the construction budget will increase.
“There will be an increase in the construction budget,” he says.
The tunnel itself had a management budget of DKK 52.6 billion in 2015. Since then, inflation alone has pushed the budget significantly higher. According to Mikkel Hemmingsen, the inflation adjustment amounts to around 40 per cent on top of the original 2015 budget.
That means the tunnel itself is now expected to cost more than DKK 70 billion in current prices. Including landworks on both sides of the border, the total construction bill is expected to exceed DKK 100 billion, according to Børsen.
Sund & Bælt says several factors still support the project’s finances. The project has received far more EU funding than originally expected. According to Børsen, EU support is now close to DKK 11 billion, roughly twice the amount first anticipated.
At the same time, Sund & Bælt locked in a large share of its loan financing when interest rates were around 0.5 per cent. That helps explain why the company still expects to remain within the agreed repayment period of 39 years.
“Our very clear expectation is that we will meet the repayment period we have agreed,” Mikkel Hemmingsen tells Børsen.
The Fehmarnbelt link is user-funded and must be repaid through traffic revenue. The delays therefore affect the finances in two ways: construction becomes more expensive to maintain, while the revenue from traffic arrives later.
For users, however, the rising construction costs do not mean that the latest increases will be added directly to the price of driving through the tunnel, according to Mikkel Hemmingsen.
Milestone does not remove the risk
For Sund & Bælt, the immersion of the first element is an important milestone because it shows that the technical method works. But Mikkel Hemmingsen warns against assuming that the project has now passed through its most difficult phase.
“If you think it is smooth sailing from here, you are mistaken,” he tells Børsen.
New timetable to come later
The Fehmarnbelt construction project is based on serial production. It took almost a year to cast the first element. The aim is now for the factory in Rødbyhavn to cast one element every nine weeks.
At sea, the ambition is that each element can eventually be immersed in 12 days. But that requires production, weather conditions, vessels and the work in the tunnel trench to align. This is precisely where the timetable remains vulnerable.
The plan had been for the Fehmarnbelt link to open in 2029. Under the new plan now being prepared by Sund & Bælt, road traffic will be able to pass through the tunnel in 2032 at the earliest.
Sund & Bælt will only present a full revised timetable once it has gained more concrete experience from the immersion of the first tunnel elements. The new timetable will be based, among other things, on experience with both standard elements and special elements.
At the same time, the company states in a press release that construction on the Danish side is currently about two years behind schedule. There are also constraints on the work at sea.
According to Mikkel Hemmingsen, these conditions may mean that additional buffers need to be built into the timetable.
“When you have those constraints within a programme like this, you have to build some additional safety margins into it,” he tells Børsen.
Over the past year, FemernBusiness has described how the immersion of the tunnel elements has become the critical phase of the project. Coverage has focused on the key vessel Ivy, the tunnel trench, regulatory requirements, disagreement over the timetable and the financial disputes between the client, Femern A/S under Sund & Bælt, and the main contractor, Femern Link Contractors.
