Netlipse, European Infrastructure Procurement Copenhagen, 08 May 2012

Transcription

1 Netlipse, European Infrastructure Procurement Copenhagen, 08 May 2012 Perspective on procurement - recent practices and the future Peter Lundhus, Former Technical Director, SBH 1

2 Who is Peter Lundhus? Contractor yrs. Owner yrs. Involved in the 3 Major Fixed Links: Great Belt Project Director - Procurement - Construction Øresund Link Technical Director - Approvals - Procurement - Construction Femern Link State Treaty prep Technical Director - Approvals & - Procurement Netlipse - Copenhagen, Peter Lundhus May 2012

3 Agenda for the Presentation Background experience The Great Belt Link The Øresund Link Recent procurement practice on the Øresund Link Developments for The Fehmarnbelt Link ? Appeal? Netlipse - Copenhagen, Peter Lundhus May 2012

4 Netlipse - Copenhagen, Peter Lundhus May 2012

5 The Great Belt Link Opened 1997/8 The Great Belt Link Road and rail Suspension Bridge Netlipse - Copenhagen, Peter Lundhus May 2012

6 Great Belt Link Bored tunnel for twin tracks 6

7 Øresund Now crossing a national Border DENMARK SWEDEN Malmø København 7

8 Tunnel factory - assembly line 8

9 Øresund Link Immersed tube tunnel for road - rail

10 Øresund Link Cable-stayed bridge for road and rail

11 Øresund placing a 7000 T prefabricated section 11

12 Royals meet after years and 4 years of construction 12

13 The Fehmarnbelt Fixed Link - the State Treaty dated 3. September

14 LOLLAND, DENMARK Råhavegård, 04. oktober km PETER LUNDHUS, M.Sc. Adm. Dir. Femern Bælt A/S FEHMARN, GERMANY 08. May 2012 Netlipse - Copenhagen, Peter Lundhus 14

15 a. The navigation spans across Fehmarnbelt A cable-stayed bridge solution 2 * 724 m 08. May 2012 Netlipse - Copenhagen, Peter Lundhus 15

16 b. Fehmarn Link : 20 km long immersed tunnel 89 TE á 42 m x 217 m Water depth 35 m Dredging depth 45 m 08. May 2012 Netlipse - Copenhagen, Peter Lundhus 16

17 The Fehmarnbelt and Mont Blanc tunnel 08. May 2012 Netlipse - Copenhagen, Peter Lundhus 17

18 Proposal for an immersed tunnel solution 18

19 Storebælt lessons: Keep it simple but that s not easy! -But as simple as possible, i.e. this became Øresund management 08. May 2012 Netlipse - Copenhagen, Peter Lundhus 19

20 Øresund data Øresund duration: 8 years ( ) Construction time: 5 years ( ) Contracts: Budget: Turnover: 9 major (10+ nationalities) 3 billion (1990 prices) 50 million/month at 2-year peak 20

21 Result / Øresund: Win-Win-Win situation All objectives were met, despite crossing a border: The link opened on July 1, 2000 (9 months early) Budget not exceeded Within the given environmental framework No contractors lost money on the project No arbitrations or disputes No political or media-related complications A textbook win-win situation + even the Public won 21

22 Øresund Link Why was the Øresund procurement so successful? 22

23 Owner s role - Our attitude Responsible for managing the process, meaning not the details of execution Managing the process means Being pro-active on all fronts Delegating clear responsibilities and authority 23

24 Partnership because: Else too many enemies? Authorities in general Local authorities Individuals Companies Organisations The public in general Neighbours around Øresund Consultants Contractors The Owner The Press Parliaments Other Fixed Links Competitors (ferries) Rail operators Infrastructural managers Shareholders 24

25 Partnership - How? Co-operation happens only, if both parties profit 25

26 Partnership - Owner s initial choices The Owner (we) decided: to be a competent Owner to produce no budget surprises to allow contractors to make money to ensure long term good quality Mental consequence: We are like a Contractor ourselves hired by the Public i.e. The Main Contractor i.e. Being part of the solutions to the problem, - not part of the problem itself. 26

27 Tendering basis EEC 93/37, most economically advantageous tender Transparency required throughout Design + Construct Delegation (Partnership) Functional criteria Illustrative Design (thorough, but for information only) DRB included up front (General Conditions) 27

28 Tendering results No nasty qualifications Minor qualifications - no effect Economically most advantageous tenderer always got the job Unsuccessful tenderers told why (feed-back) 28

29 Contract basis Clearly written contracts Based on expectations of co-operation, not conflicts (but...) Clearly defined requirements No compromise on quality (= low future maintenance) Functional criteria + Illustrative design Construction contracts had a clear division of risks, i.e. All risks were identified Risks involving gambling belong to the Owner All risks under the contractor s control belong to the contractor All other risks, (not under the contractor s control) made price-able 29

30 Contract payment principles Thorough planning of all activities Milestone Concept Max. 1% per milestone Selfcontrol, MUST be documented prior to payment 30

31 DRB operations psychological effects 3 separate and independent DRBs All agreed at contract award DRB meeting frequency 2-3 months Safeguarded early detection and solution No DRB had ever to make a decision Disputes always presented with a solution i.e. no claims what-so-ever were presented 31

32 Result / Øresund: Win-Win-Win situation Despite difficulties of crossing a national border: The link opened on July 1, 2000 (9 months early) Budget not exceeded Within the given environmental framework No contractors lost money on the project No arbitrations or disputes No political or media-related complications 32

33 Partnering in practice - A textbook win-win situation A professional Client (i.e. as professional as consultants and contractors) - behaves like a main contractor, involved - knows, what he wants - is pro-active in finding common solutions - is part of the solution not part of the problem - takes charge of managing the contracts, not details - creates a common team spirit - delegates, but follows up - selects competent contractors All very sensible and down - to - earth issues 08. May 2012 Netlipse - Copenhagen, Peter Lundhus 33

34 The future then: Fehmarnbelt Link Useful strategies remain: Partnership thinking, relationsship between equal parties Exploiting Contractors abilities to constantly innovate, D&C Taking charge, managing Pro-activity Clearly written contracts, where all risks are taken proper care of DRB: Early Solutions to problems 34

35 EUREKA! we ve cracked it! YES, we know how to manage a large contract now - This is the man-management part But, The framework gets more and more complicated legislation, rules and regulations grows. 08. May 2012 Netlipse - Copenhagen, Peter Lundhus 35

36 SO, since Øresund.. the world has become 20 years older: Todays Owner has many more responsibilities (Environment / CSR) Timing of permits between two countries systems is problematic Environmental issues dominate, out of all proportions Legal missteps may cause court processes lasting years A clear tendency of Risk Avoidance at all levels, resulting in more and more control, even at detailed level 08. May 2012 Netlipse - Copenhagen, Peter Lundhus 36

37 Ex: Legal Paradox problem EIA application issued by Owner to get project approval for going to tender EIA application requires operational details i.e.how to do, production rates, effects Operational details different schemes available in the tenders The EU concept requires a very competent Owner to fulfil - Or: Design & Construct will no longer be an option 08. May 2012 Netlipse - Copenhagen, Peter Lundhus 37

38 1. Purist version The serial process State treaty contract award = = 9 years (excl. appeals) Issue request for Approval Contract Award Investigating, reporting writing applications Application processed Legal appeals? PQ Bidding process Approvals received DK-Legislation 08. May 2012 Netlipse - Copenhagen, Peter Lundhus 38

39 2. Risky version The parallel process = 7 years State treaty contract award = = 7 years (excl. appeals) Issue request for Approval P Q Bidding process Award Writing applications Application processed Appeals? Legislation Approvals received Benefit: 2 years saved, Risk: Bidding documents and approvals do not match 08. May 2012 Netlipse - Copenhagen, Peter Lundhus 39

40 Development: Project durations Øresund: 17 km road and rail - environmental permits 3 years = 38% - construction 5 years = 62% - state agreement to opening 8 years = 100% Femern: 20 km road and rail (estimate today): - environmental permits 7 years = 52% - construction 6½ years = 48% - state agreement to opening 13½ years =100% The risky version, i.e. a parallel process takes 7 years for a permit The purist version,i.e a serial process takes 2 years more, i.e. 9 years 08. May 2012 Netlipse - Copenhagen, Peter Lundhus 40

41 My personal conclusions Parties available knowledge no longer efficiently used in the procurement process, D & C solutions will become missing Environmental issues are too dominant politically misused The Owners experience and competence is no longer valued Result: - Technical solutions will become less efficient - Timeschedules become more untrustworthy - Project budgets will be running wild This is a case of vicious circle, we will run out of money! 08. May 2012 Netlipse - Copenhagen, Peter Lundhus 41

42 My appeal The construction process is not the probem The framework is becoming a serious problem We need to create a better framework: - a practical environmental administrative frame - and at the same time be able to protect the environment, to save time and to save money Don t we? Thank you for your attention 08. May 2012 Netlipse - Copenhagen, Peter Lundhus 42