Storstroem Bridge Joint Venture - the contractor behind the Storstrøm Bridge - has just submitted a financial statement for 2024 with a deficit of 741 million kroner.
This comes after yet another year of delays, rising costs, and continued uncertainty about the finances of the state billion-kroner project.
According to management, the contract has become even more loss-making in 2024. In the financial statement, the company refers, among other things, to unusual sea conditions and problems with element production.
Injected 741 million into the company
Storstroem Bridge Joint Venture I/S has no equity and is only able to continue work because the Italian parent company Itinera S.p.A. has injected 741 million kroner in new capital to cover the year's loss.
At the same time, the Danish Road Directorate has provided a so-called liquidity bridge - a temporary financial support scheme to ensure that construction does not come to a halt. The scheme was agreed upon in 2023 and consists of 700 million kroner, which has been paid out in instalments as the contractor has reached a number of milestones in the construction. The entire amount has now been paid out. The payment was made against a bank guarantee.
The new Storstrøm Bridge
• Adopted by the Danish Parliament on 21 March 2013
• Groundbreaking: 27 September 2018
• Construction budget: 4.3 billion DKK (2023 prices)
• EU support: Up to 425 million DKK
• Length: 3,832 metres - Denmark's third longest bridge
• Layout: 2 railway tracks, 9-metre road and path for pedestrians and cyclists
• Expected ready: Car traffic in 2025, trains in 2027
Management assesses that the company can continue operations for at least another year, partly because the parent company has issued a letter of support.
Major Arbitration
The contractor has raised significant financial claims against the Danish Road Directorate and states in the accounts that a substantial part of the value of 'work in progress' depends on whether these claims are recognised. According to the company, the dispute concerns changes and delays in the approval process as well as technical requirements from the client. The case is to be settled by arbitration.
The management expects the result for 2025 to be roughly balanced.
A Project Marked by Problems from the Start
The current accounts add to a series of challenges that have marked the Storstrøm Bridge since the beginning. Originally, the contractor consortium consisted of three Italian companies: Itinera, Condotte, and Grandi Lavori Fincosit. Along the way, the latter two withdrew, partly after cases of corruption in their home country. This left Itinera solely responsible for the construction.
The project has also faced challenges with the working environment and working conditions. A significant number of orders have been issued by the Danish Working Environment Authority, and there have been cases of disputes over wages and employment conditions, as well as examples of accidents that were not reported. Some incidents have also involved trade union organisation.
At the same time, the economy has continuously deteriorated. Already in previous accounts, Itinera has pointed to problems with design approvals and technical changes as the cause of significant additional costs and the need to recalculate both budgets and organisation.
According to the Danish Road Directorate, the bridge is expected to be ready for car traffic in 2025 and rail traffic in 2027.
