17. January 2008 DB Export section
DRB &
The Øresund Link
Peter LundhusMan. Dir. Femern Bælt A/S
17. January 2008
17. January 2008
Øresund – Crossing a Border
Copenhagen
Malmø
17. January 2008
Who am I?
Contractor 20 yearsOwner 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
Femern Belt Link
BanverketVägverket
Øresund(Land)
Sund & Bælt Holding
The Danish state The Swedish state
SVEDAB (Land)
Øresund Link Consortium
50 % 50 %
50 % 50 %
Great Belt Link
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 yearsConstruction time: 5 years
Contracts: 9 major (10+ nationalities)Budget: Euro 3 billion (1990 prices)
Monthly T/O: Approx. US $ 50 million
17. January 2008
Bridgebuilder job
ContractorsParliaments
The Press
The Owner
IndividualsCompanies
Organisations
Authorities in general
Local authorities
Consultants
Other Fixed Links
Competitors(ferries) Rail
operatorsInfrastructural
managers
Shareholders
”Neighbours” around Øresund
The public in general
OH 09
17. January 2008
“He flung himself from the room, flung himself upon his horse and rode madly off in all directions.”
Stephen Leacock
What strategy ?
17. January 2008
Partnership - Goals, a comparison
‘Owner’ requirements:
Value for money
Timely completion
On budget
Contractor’s intentions:
Value for money
Timely completion
On (his) budget (= profit)
OH 03
17. January 2008
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
OH 04
17. January 2008
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
OH 06
17. January 2008
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.
OH 07
17. January 2008
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.
OH 08
17. January 2008
Partnership # 1- How?
Co-operation happens only, if both parties profit from it
OH 10
17. January 2008
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
OH 12
17. January 2008
Procurement
The procurement of works follows EU Directive 93/37/EEC of 14 June 1993:
Restricted procedure with prequalification
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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
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Intergrated contract principles
Milestone Concept• Max. 1% (paid when all NCO fixed)• Selfcontrol
Dispute Review Board• Decision on manning at award• Frequent meeting schedule
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DRB operations
Individual DRBs
DRB meeting frequency 2-3 months
No DRB ever had to make a decision
i.e. No claims
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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
Win-win situation
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