This presentation was made by Kaj V. Holm, Denmark, at the 10th annual meeting of the OECD Network of Senior PPP and Infrastructure Officials held at the OECD Headquarters, Paris, on 21 March 2017

1. Finansiel statusOECD
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

2. THE ØRESUND REGION IN EUROPE

3. marts 2017

4. MEGA PROJECTS IN DENMARK
marts 20174
• 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

5. 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)

6. 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)

7. 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

8. THE STATE GUARANTEE MODEL
BASIC FLOWS
The Danish/
Swedish State
UsersLenders
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

9. 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

10. 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