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DRB & The Øresund Link

DRB & The Øresund Link. Peter Lundhus Man. Dir. Femern Bælt A/S. Øresund – Crossing a Border. Malmø. Copenhagen. Who am I?. Contractor 20 years Owner 20 yrs. - involved in the 3 major links. Great Belt Link 1988 - 1992 Øresund Link 1992 - 2000 Fehmarn Link 2001 - ?.

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DRB & The Øresund Link

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  1. DRB & The Øresund Link Peter Lundhus Man. Dir. Femern Bælt A/S DB Export section

  2. 17. January 2008

  3. Øresund – Crossing a Border Malmø Copenhagen 17. January 2008

  4. Who am I? • Contractor 20 years • Owner 20 yrs. - involved in the 3 major links • Great Belt Link 1988 - 1992 • Øresund Link 1992 - 2000 • FehmarnLink 2001 - ? 17. January 2008

  5. The organisation behind the 3 Links The Danish state The Swedish state Sund & Bælt Holding Vägverket Banverket 50 % 50 % Great Belt Link Femern Belt Link Øresund (Land) SVEDAB (Land) 50 % 50 % Øresund Link Consortium 17. January 2008

  6. Tunnel assembly factory, Copenhagen 17. January 2008

  7. Øresund – 55 000 T tunnel units 17. January 2008

  8. Bridgefoundation assembly line, Malmö 17. January 2008

  9. Øresund – placing a 7000 T bridge section 17. January 2008

  10. The connecting bridge section – 4 years + 1 mths. 17. January 2008

  11. Consortium Agreement § 1 Name and Operations of the Consortium 1. In the light of the provisions of the agreement dated 23 March 1991 between thegovernments of Sweden and Denmark the Parties hereby establisha consortium, which, under the name : ØRESUNDSKONSORTIET shall on behalf of both Parties and as a single entity own and be responsible for the planning, designing, financing, construction, operation and maintenance of a toll-funded fixed link for rail and road traffic between Kastrup and Limhamn, hereinafter referred to as “the Øresund Link”. 2. The operations of the Consortium shall be conducted in accordance with sound business principles. 17. January 2008

  12. Main numbers Øresund duration: 8 years Construction time: 5 years Contracts: 9 major (10+ nationalities) Budget: Euro 3 billion (1990 prices) Monthly T/O: Approx. US $ 50 million 17. January 2008

  13. Bridgebuilder job Individuals Companies Organisations Authorities in general The public in general Local authorities ”Neighbours” around Øresund The Press Consultants The Owner Contractors Parliaments Other Fixed Links Shareholders Competitors (ferries) Rail operators Infrastructural managers 17. January 2008 OH 09

  14. What strategy ? “He flung himself from the room, flung himself upon his horse and rode madly off in all directions.” Stephen Leacock 17. January 2008

  15. ‘Owner’ requirements: Value for money Timely completion On budget Contractor’s intentions: Value for money Timely completion On (his) budget (= profit) Partnership - Goals, a comparison 17. January 2008 OH 03

  16. Partnership - Historic conclusions (mine) General observations over time: 1. ‘Owners’ are rarely aware of their obligations in the process 2. The result is an unclear contract 3. An unclear contract is not a satisfactory foundation for cooperation 17. January 2008 OH 04

  17. Partnership - ‘Owners’ responsibilities # 1 a) Define clearly - his functional requirements - his timeframe - his quality level b) Choose risk philosophy c) Choose advisors d) Choose contractors 17. January 2008 OH 06

  18. Partnership - ‘Owners’ responsibility # 2 Understand the relationship: • Time, • Quality, and • Money Any change after award: • only 2 out of 3 – can remain fixed at the same time. 17. January 2008 OH 07

  19. Partnership - Konsortiets original choices Konsortiet decided: - to be a competent ’Owner’ • to produce no budget surprises, • allow contractors to make money - to ensure long term good quality Mental consequence: • “We are a Contractor ourselves - the Main Contractor” i.e. part of the solution to the problem, - not part of the problem itself. 17. January 2008 OH 08

  20. Partnership # 1- How? Co-operation happens only, if both parties profit from it 17. January 2008 OH 10

  21. Partnership #2 - Contract basis • Clearly written contracts • Based on expectations of co-operation, not conflicts • Clearly defined requirements • No compromise on quality (= low maintenance) • Construction contracts had a clear division of risks, i.e. • gambling belongs to the Owner • all defined risks, not under the contractor’s control, were price-able • all risks under the contractor’s control belonged solely to the contractor 17. January 2008 OH 12

  22. Procurement The procurement of works follows EU Directive 93/37/EEC of 14 June 1993: Restricted procedure with prequalification 17. January 2008

  23. Tendering basis • Transparency required • EEC 93/37 • most advantageous tender • Design + Construct • Delegation / Partnership • Functional criteria • Illustrative Design (For information only) • DRB included (General Conditions 17. January 2008

  24. Intergrated contract principles • Milestone Concept • Max. 1% (paid when all NCO fixed) • Selfcontrol • Dispute Review Board • Decision on manning at award • Frequent meeting schedule 17. January 2008

  25. DRB operations • Individual DRBs • DRB meeting frequency 2-3 months • No DRB ever had to make a decision i.e. No claims 17. January 2008

  26. Win-win situation All objectives were met: • The link opened on July 1, 2000 (9 months early) • Budget not exceeded • Within environmental framework • No contractors lost money on the project • No arbitrations or disputes • No political or media-related complications A textbook win-win situation 17. January 2008

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