A/S Femern Landanlæg Annual report 3 Company objective A/S Femern Landanlæg’s main objective is to organise and undertake the preparations, investigations, planning and other necessary actions relating to the expansion and upgrading of the associated landworks for the fixed link across the Fehmarnbelt. In addition, the company’s objective is to hold all shares in Femern A/S. Highlights of the year A/S Femern Landanlæg is a 100 per cent owned subsidiary of Sund & Bælt Holding A/S and is the parent company of Femern A/S. A/S Femern Landanlæg was established in order to administer the ownership and financing of the Danish landworks in connection with the fixed link across the Fehmarnbelt. Sund & Bælt Holding A/S is responsible for coordinating the planning and construction activities in the various part-projects that comprise the overall Fehmarnbelt project. Co-ordination between the coast-to-coast link and the Danish road and rail hinterland connections covers the interfaces relating to the road and railway engineering solutions, progress in project planning and resource consumption. Furthermore, the company also deals with budget control and quarterly reporting to the Ministry of Transport and Housing. With the adoption of the Act on the construction and operation of a fixed link across the Fehmarnbelt with associated landworks in Denmark in April 2015, A/S Femern Landanlæg was authorised to build and operate the Danish landworks associated with a fixed link across the Fehmarnbelt. In issuing the executive order on the delegation of certain tasks and powers for the construction and operation of a fixed link across the Fehmarnbelt with associated landworks in Denmark, the role of client for the extension and upgrading of the rail system was assigned to Banedanmark on 17 September 2015. The Danish Road Directorate is the client responsible for the upgrading and extension of the Danish road system. A/S Femern Landanlæg remains responsible for the ownership and financing of the Danish landworks. The parties behind Fehmarnbelt link reached a political agreement on 4 March 2016 on the way forward for the project. Based on an updated financial analysis, it is evident that the total costs for upgrading the Danish landworks amount to DKK 9.5 billion (2015 prices). The overall timetable for the Danish landworks gave the green light for the expansion and upgrading of rail facilities with Banedanmark responsible for execution, from Ringsted and down to Nykøbing Falster with completion in 2021 – apart from the electrification which will be completed in 2024. All major construction contracts for completing the work between Ringsted and Nykøbing Falster have been concluded and implemented and some have been completed. In 2019, the first of the three major track closures on the section was undertaken so that 46 out of a total of 54 bridges are ready for service. Of this, the completion of the new Masnedsund Bridge was the biggest task. Three out of the six stations are ready for commissioning and 75 per cent of all construction works have been carried out. Preparations for the full expansion and upgrading of the remaining part of the railway facilities from Nykøbing Falster and down to the coast-to-coast link, with an interface at the new station of Holeby, have commenced with the tender for consultancy services at the end of 2019. An independent quality assurance of Femern Landanlæg’s construction budget was implemented during the year. An Estimate-at-Completion (EAC) has been completed as part of the report. The EAC is based on costs already incurred plus planned future costs and a risk premium based on P80. This is an estimate which carries a certain amount of uncertainty. The report estimates that under the given assumptions and with 80 per cent probability, the EAC will not exceed the budget framework of DKK 9.5 billion. On the basis of the report’s recommendations, Banedanmark and A/S Femern Landanlæg have implemented a number of initiatives to support the future financial management of the project. The company’s capitalised construction costs amount to DKK 3,232 million. This comprises project costs of DKK 3,890 million offset by EU subsidy of DKK 658 million. Key figures, DKK million Femern Landanlæg Operating expenses Depreciation Operating loss (EBIT) Financial items excl. value adjustments Loss before financial value adjustments Value adjustments, net Loss before tax Tax Loss after tax 2019 -3.3 0.0 -3.3 2018 -3.1 0.0 -3.1 0.0 0.0 -3.3 -1,034,2 -1,037.4 228.2 -809.2 -3.1 -101.7 -104.7 26.4 -78.3 The financial result before tax is a loss of DKK 1,037 million. After tax, the result is a loss of 809 million. This can primarily be ascribed to a negative value adjustment of DKK 1,034 million.
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