The Sund & Bælt Group has appointed a new auditor. PwC is taking over the assignment from Deloitte following an EU tender, and the agreement includes, among others, Femern Bælt A/S.
The change comes at a time when the Fehmarnbelt project expects to spend more than DKK 30 million a day and has just entered the most decisive phase of construction.
PwC is taking over the assignment from Deloitte following an EU tender for audit services for the entire Sund & Bælt Group. This appears from a notice in the EU’s tender database, where the audit assignment covers Sund & Bælt Holding A/S, Femern Bælt A/S, A/S Femern Landanlæg, A/S Storebælt, A/S Øresund, Sund & Bælt Partner A/S, the BroBizz companies and Øresundsbro Konsortiet I/S.
The assignment includes, among other things, the audit and signing of annual reports, audit records and so-called assurance engagements. The framework agreement has an estimated value of DKK 35 million excluding VAT and a maximum value of DKK 45 million. PwC won the assignment with a bid of DKK 13,960,600. Three bids were submitted.
The agreement initially runs for 12 months and can be extended three times by 12 months. That means PwC could hold the audit assignment for up to four years.
Changes auditor after six years
The change comes after six years with Deloitte as auditor. In 2020, the change went in the opposite direction, when Deloitte took over the assignment from PwC. Auditor changes are common in large companies, where audit assignments are regularly put out to tender and rules apply on rotation of the responsible auditor.
But the timing is notable because the Fehmarnbelt project has just entered the phase in which the tunnel will be assembled on the seabed. The first of a total of 89 tunnel elements has been lowered into place in the Fehmarnbelt. The element is 217 metres long, weighs more than 73,000 tonnes and forms the first section of the 18-kilometre tunnel between Rødbyhavn and Puttgarden.
According to Femern A/S’ latest annual report, project activities on the fixed link are expected to amount to around DKK 11 billion in 2026. That corresponds to more than DKK 30 million a day. The money will be spent, among other things, on the production of tunnel elements, work in the tunnel trench, technical installations and the continued build-up of the project on both sides of the Fehmarnbelt.
Although the first immersion has been completed, most of the work still lies ahead. The remaining tunnel elements must be cast, towed out and lowered into place before work on installations, testing and commissioning can be completed. Sund & Bælt has previously stated that the official opening in 2029 will be difficult to achieve, and that a new overall timetable is only expected once there is more experience from the immersion of the first elements.
Major claims
At the same time, the project is marked by major unresolved financial issues. The main contractor, Femern Link Contractors, has filed a claim of DKK 14.5 billion against Femern A/S under Sund & Bælt. The claim concerns changed assumptions, delays and work in the tunnel trench.
In addition, an international arbitration case is ongoing over Covid-related delays, in which the contractor is claiming around DKK 570 million.
The tunnel trench has been one of the central points of dispute between the client and the contractor. It is the 18-kilometre trench on the seabed where the 89 tunnel elements are to be placed. Sund & Bælt has paid the main contractor extra to prepare the first 650 metres of the trench, while the remaining section is still part of negotiations between the parties.
The Fehmarnbelt link will connect Lolland and the German island of Fehmarn with an 18-kilometre immersed tunnel for road and rail traffic. The project is user-financed, and delays therefore affect both construction costs and the point at which the link can begin generating revenue from traffic.
