Complaint forces Fehmarn contract signing delays 16 May 2016

Signing of the major civils contracts for the 17.6km immersed tunnel between Germany and Denmark is on hold after complaints about the procurement process were lodged by two of the unsuccessful bidders. The delay affects the award of three civils packages worth €4 billion.

Project developer Femern A/S told TunnelTalk the move was “precautionary” while its legal team investigates the complaints. Claus Baunkjær, CEO of Femern A/S said: “There are some points that we quite simply need to review with our legal advisers. Until then we’re putting the contract signing on hold and expect matters to be clearer by the end of the month.”

Three contracts – the North and South Immersed Tunnel, Portals & Ramps, and Dredging & Reclamation – were provisionally awarded in March (2016) with contracts due to be signed on Friday 13 May.

The Vinci-led Femern Link Contractors JV was chosen as preferred contractor for both the North and South Immersed Tunnel and the Portals & Ramps packages; while the Boskalis-led JV was selected for the Dredging & Reclamation lot on the undersea road and rail crossing between Denmark and Germany (Table 1).

However, on 11 May, only two days before the scheduled contract signing, the Danish Review Board for Public Procurement received a complaint over the tender process. Femern A/S told TunnelTalk it had been lodged by “two of the [unsuccessful] bidding contractors.”

Femern A/S said talks were now under way with the winning contractors “with a view to handling the situation in the most expedient way possible.” It declined to name the complainants, or give further details “in light of the legal situation.”

The procurement process on the Fehmarn project has already overrun significantly. The first financial bids from all consortia came in well over budget, resulting in a long re-bid competition last year.

However, further delays emerged, this time in the German environmental approval process, further holding up the EU-backed scheme. Even though Denmark is leading project delivery and funding, the approval process in Germany is a vital step in project development.

In March, with procurement process for the civils packages almost completed, and faced with the unexpected delay in Germany, Danish politicians gave Femern A/S the green light to award the contracts on a “conditional” basis.

Construction is unlikely to commence until around 2017, and the fixed link may not open until 2026 or later. Femern A/S said the conditional contracts would be valid for 3.5 years, but added that if construction did not start during this period then the winners would be compensated.