Troubled waters

Sinking Billions in the Baltic

Denmark tunnel dpa
Going under? The projected entrance to the Fehmarn Belt tunnel.
  • Why it matters

    Why it matters

    The Fehmarn Belt tunnel will cost German and Danish taxpayers billions. Critics say it isn’t worth the money.

  • Facts

    Facts

    • The tunnel will run for 17.6 kilometers (11 miles) between the islands of Fehmarn and Lolland.
    • Cost estimates have risen from €5.5 billion ($6.3 billion) in 2008 to €9 billion today.
    • Completion is expected in 2021.
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    Audio

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The estimated costs of the Fehmarn Belt tunnel between Germany and Denmark are continuing to rise as concerns grow that it may not gain as much traffic as projected.

German opposition to the project is becoming more vocal as MPs battle to control costs.

The underwater road and rail tunnel, conceived in 2000, is intended to link a 17.6-kilometer (11 mile) strait – called the Fehmarn Belt – that separates the German island of Fehmarn and the Danish island of Lolland. The link would then continue on to Copenhagen, some 160 kilometres away.

Estimates in 2008 put the cost of the entire tunnel project at €5.5 billion ($6.3 billion). These have now risen to €6.2 billion. Completion is expected between 2021 and 2024.

Many in northern Germany see the tunnel as a Danish whim and an ecologically harmful waste of billions.

The proposal is not very popular in some areas of north Germany. Critics view the tunnel as a Danish whim and an ecologically harmful waste of billions which will serve only a few thousand cars each day and shave only an hour off journey times to Copenhagen. They also fear it could damage the environment and undermine the seabed.

But Femern, the Danish state-owned company that is building the tunnel, disputes this. It says that the tunnel, which will charge users a toll, will pay for itself within 32 years. It adds that the project has been shown to be environmentally sound.

However, there are fears in the German region of East Holstein, which includes and surrounds Fehmarn, that the huge construction site could lead to a slump in tourism. Seaside resorts are also concerned that the laying of new railroad lines and increased freight traffic to the construction site will disrupt passenger traffic, possibly even meaning they lose direct rail connections.

Germany’s state-run rail operator, Deutsche Bahn, has also questioned the project. It has already withdrawn its investment in the project due to a feared lack of profitability and since 2009 has acted solely as a contractor and consultant for the transport ministry.

Opponents of the fixed link have already said they would sue to prevent planning permits for the project. Konstantin von Notz, a Green party MP in Germany’s parliament, the Bundestag, is also worried that too much money is flowing to the tunnel.

“The project would go on devouring money for years, or even decades,” he said. “And this at a time when we are having to close down dilapidated highway bridges.”

The Danes, however, are keen to forge ahead despite all the warnings. In a draft version of an expert report, which the newspaper Der Tagesspiegel has obtained, the German Institute for Economic Research said forecasts of possible additional traffic volume are uncertain.

The study says the tunnel would only attract a minor amount of new passenger traffic. Expected growth in passenger and freight transport would mainly be due to traffic redirected from alternative routes and, to a lesser extent, to a change in transport modes, researchers said.

The institute also said planners did not sufficiently consider how ferry operators who have long provided services between Fehmarn and Lolland might adjust their business to compete with the fixed link.

Tunnel planners say the biggest economic benefits would be the time saved by drivers and toll revenues. A look at day-to-day traffic, however, throws that into question.

Around a third of Danes and Swedes take ferries to visit shops in the German ferry terminal, where they can buy goods such as alcohol at much cheaper prices than at home. Germans use the ferries as a pleasurable way to begin and end vacations in Scandinavia.

The fact that ferries will continue to ply the route between Fehmarn and Lolland has been ignored in projections up to now. Even if they continue to operate at just half capacity, it would be tantamount to financial death for the tunnel: Toll revenues would not be enough to recoup construction costs.

Project planners also assume that future tolls would correspond to the price for a ferry crossing. But that ignores the fact that most transport companies pay discounted rates and are unlikely to switch to the tunnel.

For them, it would be up to 30 percent more expensive to save the hour of traveling– and most products transported on this route are in no way time-critical. Drivers transporting freight also use ferry crossings for legally required rest breaks.  If they used the tunnel they would have to take breaks elsewhere.

There would also be additional burdens for German taxpayers, which up to now have not been calculated. Building the tunnel under the Fehmarn Belt, in addition to land acquisition in Denmark and Germany, would be paid for solely from taxes. Despite warnings from the German audit office, these costs have not been reliably calculated.

According to the audit office, land acquisition in Germany would be 60 percent higher than has been assumed up to now, totaling about €1.7 billion. It could be as much as €2.3 billion, and it’s unclear where the extra money would come from.

Bettina Hagedorn, a Social Democrat MP who is responsible for transport issues on Bundestag’s budget committee, is calling for an updated estimate of costs.

“Since 2009 the Public Accounts Committee has requested a number of different reports from the transport ministry for joint critical evaluation with the audit office,” she said. “So far these have not been informative.”

Mr. von Notz wants the federal audit office to reevaluate how much the project would actually cost. That would mean revisiting agreements made with Denmark. If conditions had changed since, then these agreements must be adapted “to reality,” he said.

Could that mean canceling the agreements? Leaders in Berlin have already seen the pessimistic outlook of the German Institute for Economic Research, which concluded: “The feasibility of the whole project is in question.”

Full financing of the tunnel must get final approval as a state subsidy by the European Commission, the E.U.’s executive arm. The subsidy framework for financing the planning phase, which was approved by the Commission in 2009, was intentionally violated, according to some critics from Denmark.

For example, the budget was increased, loans of indefinite duration were granted instead of state guarantees, and funds were diverted to another company and misappropriated for initial construction work, critics say.

So despite years of lofty tunnel ambitions, final approval is by no means assured.

 

This article first appeared in Tagesspiegel. To contact the author: redaktion@tagesspiegel.de 

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