Beneath the surface of the Fehmarn Belt, a huge conflict over money and responsibility has arisen. The contractor consortium behind the tunnel construction, Fehmarn Link Contractors (FLC), is now demanding 1.95 billion euros (14.5 billion kroner) from the client, Femern A/S. The claim is outlined in the contractor's internal status report, which FemernBusiness possesses. Thus, the fixed link to Germany could end up being significantly more expensive than planned.
A status report is the contractor's monthly report to the client, detailing progress, challenges, and finances in the project. It states that the claim is related to the work at sea, where the contractor believes they have had delayed access to the tunnel trench. The disagreement concerns the conditions and restrictions that apply to work on the belt between Denmark and Germany.
The claim was made in connection with the so-called Instructed Variation (VO-058), which was sent to the client on 22 April 2024. The contractor assesses the claim at 1.95 billion euros and estimates that the delay in work amounts to 20 months. The claim is based on a prolonged process where the parties have disagreed on access conditions to the tunnel trench.
Kim Haugbølle is a senior researcher at the Department of the Built Environment at Aalborg University. He explains that there is a large calculation and a major conflict behind the figure.
- Behind the claim are calculations on equipment rental, depreciation on the equipment one owns, and wages for employees. And it quickly adds up, but just because you make a claim for 14.5 billion, it doesn't mean you get it.
Arbitration in another case
Delayed access to the tunnel trench not only affects work at sea. It also has consequences for a number of subsequent activities in the project because work on the Fehmarn Belt is a prerequisite for proceeding with virtually all central parts of the construction.
The claim comes at a time when the Fehmarn project is already marked by significant economic and legal disagreements between the client and the contractor. In another case, FLC has made a claim for 77 million euros in connection with delays and additional costs during the coronavirus pandemic. That case was first handled by the joint Dispute Resolution Board and has now been taken to arbitration at the International Chamber of Commerce, ICC.
The disagreement over the many billions could end up in the same place. It is a dispute that needs to be resolved. Either through negotiations or with the help of a judge.
- If there is no agreement, it will probably end in arbitration. It is usually faster than a court case, but it still takes a long time and costs a lot of money, says Kim Haugbølle.
14.5 billion kroner will be a significant additional bill on top of the project's total construction budget, which is 55.1 billion kroner in 2015 prices - equivalent to around 67 billion kroner.
Kasper Roug, a member of the Danish Parliament for the Social Democrats and elected in Lolland, is closely following the construction. He calls for transparency.
- It is important to have transparency. Especially if it turns out that the connection becomes much more expensive than budgeted. We are spending a lot of money on, among other things, defence these years, and we do not need extra billion-kroner bills, he says.
At the same time, he expresses confidence that Femern A/S can handle the conflict.
- I have confidence that Femern A/S can handle this conflict with FLC. And that they inform the political system about the matter to the extent necessary.
Disagreement about the schedule
Who's who
Sund & Bælt: Owned by the state and responsible for the operation of major bridge projects. The Great Belt Bridge, the Øresund Bridge, and the Fehmarn Belt connection.
Femern A/S: Is the Danish client on the project. 100 percent owned by the state.
Femern Link Contractors: An international consortium of a large number of companies. Including French Vinci, Dutch BAM, and Danish Aarsleff. They are building the tunnel and casting the enormous elements.
In addition to the financial demands, there is also growing disagreement about the construction schedule. According to the contractor's status report, FLC expects that the first tunnel element can be submerged at the earliest in May 2026. The assessment is closely linked to the work on the tunnel trench, which according to the contractor is neither ready nor approved.
FLC has rejected the data provided by Femern A/S about the condition of the trench and has conducted its own quality tests. They assess that the trench cannot be handed over until the so-called Trench Verification Protocol is completed. Only then can the work of lowering the first tunnel elements begin. Femern A/S still maintains that the first tunnel element can be submerged this year.
Since the beginning of the project, the official plan has been for the connection to be ready in 2029. The client has long adhered to this schedule, even though several of the project's milestones have been significantly delayed. Femern A/S has announced that an updated schedule will be provided once the first tunnel elements are submerged.
Neither Femern A/S, Sund & Bælt, Femern Link Contractors nor the Minister of Transport Thomas Danielsen (V) wish to comment on the matter.
