Finansiel status

OECD Infrastructure Forum Paris 20-21 March 2017 Mega Projects - Why are they difficult and what can be done about it?

Kaj V. Holm Deputy CEO Øresundsbro Konsortiet

THE ØRESUND REGION IN EUROPE

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MEGA PROJECTS IN DENMARK

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• Great Belt internal Danish project opened in 1998

• Øresund connecting Denmark and Sweden opened in 2000

• Femern Belt between Denmark and Germany opening approx. 2028

• Metro in Copenhagen opened in 2002 new lines in 2019

All these projects are based on the co-called State Guarantee Model Great Belt, Øresund and Femern Belt are all combined road and railway projects managed within the Sund & Belt Group

INFRASTRUCTURE PROJECTS IN DENMARK The Great Belt Fixed Link (100 pct. Danish)

• Debt at opening (1998): DKK 36,5 bn (EUR 4,9 bn)

• Debt end 2016 DKK 21,3 bn (EUR 2,9 bn)

• Annual turnover DKK 3,5 bn (EUR 470 m)

• Expected, final repayment in 2028 (30 years from opening)

INFRASTRUCTURE PROJECTS IN DENMARK

The Øresund Fixed Link (joint and severally owned and guaranteed with Sweden) • Dept at opening (2000): DKK 19,6 bn (EUR 2,6 bn)

• Debt end 2016 DKK 13,4 bn (DKK 1,8 bn EUR)

• Annual turnover DKK 1,9 bn (EUR 255 m)

• Expected, final repayment in 2034 (34 years from opening)

INFRASTRUCTURE PROJECTS IN DENMARK

The Femern Belt Fixed Link

• Construction Act passed by Folketinget (the Danish Parliament) on 28 April 2015

• Final go-ahead from Danish

Government March 4, 2016 • German Approval is still

outstanding • Expected repayment period:

36 years

THE STATE GUARANTEE MODEL BASIC FLOWS

The Danish/ Swedish State

Users Lenders State Owned Limited Company

Contractors (design and build)

Contractors, Operations & Maintenance

Loans User payment (Toll, etc.)

Equity + state guarantee

Contractual payments

Amortisation & Interest pay-ments

ØRESUND (BI-NATIONAL DANSIH-SWEDISH PROJECT)

• Political commitment in both countries

• Organized as independent company with own Board of Directors and Executive Management

• Financially independent from State Budgets – focus on project, not on politics

• Efficient tender strategy (Design & Build) Responsibilty of owner and contractor well known

• Efficient risk allocation – owner carried well-defined risks that could not be handled effectively by contractor

• Life cycle approach

FINANCIALLY INDEPENDENT FROM STATE BUDGET

• Construction Act passed by Parliament

• All costs recovered by cash flow generated by the Project

• Variation in the Project’s financial performance is reflected in repayment period

• High degree of transparency (annual reports, auditing etc.) Quarterly meetings with Ministry of Transport