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DRB & The Øresund Link Peter Lundhus Man. Dir. Femern Bælt A/S 17. January 2008 DB Export section 17. January 2008 Øresund – Crossing a Border Malmø Copenhagen 17. January 2008 Who am I? Contractor Owner 20 years 20 yrs. - involved in the 3 major links • Great Belt Link 1988 - 1992 • Øresund Link 1992 - 2000 • Fehmarn Link 2001 - ? 17. January 2008 The organisation behind the 3 Links The Danish state The Swedish state Sund & Bælt Holding Vägverket 50 % Great Belt Link Femern Belt Link Øresund (Land) 50 % Banverket 50 % SVEDAB (Land) 50 % Øresund Link Consortium 17. January 2008 Tunnel assembly factory, Copenhagen 17. January 2008 Øresund – 55 000 T tunnel units 17. January 2008 Bridgefoundation assembly line, Malmö 17. January 2008 Øresund – placing a 7000 T bridge section 17. January 2008 The connecting bridge section – 4 years + 1 mths. 17. January 2008 Consortium Agreement §1 Name and Operations of the Consortium 1. In the light of the provisions of the agreement dated 23 March 1991 between the governments of Sweden and Denmark the Parties hereby establish a 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 Main numbers Øresund duration: 8 years Construction time: 5 years Contracts: Budget: Monthly T/O: 9 major (10+ nationalities) Euro 3 billion (1990 prices) Approx. US $ 50 million 17. January 2008 Bridgebuilder job Authorities in general Individuals Companies Organisations Local authorities The public in general ”Neighbours” around Øresund Consultants The Press The Owner Contractors Parliaments Other Fixed Links Competitors (ferries) Shareholders Rail operators 17. January 2008 Infrastructural managers OH 09 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 Partnership - Goals, a comparison ‘Owner’ requirements: Contractor’s intentions: Value for money Value for money Timely completion Timely completion On budget On (his) budget (= profit) 17. January 2008 OH 03 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 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 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 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 Partnership # 1- How? Co-operation happens only, if both parties profit from it 17. January 2008 OH 10 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 Procurement The procurement of works follows EU Directive 93/37/EEC of 14 June 1993: Restricted procedure with prequalification 17. January 2008 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 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 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 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