Sotra Link is the winner of the rv. 555 Sotra Connection PPP contract
Two suppliers have competed for the largest fixed-price road infrastructure contract in Norwegian history to date.
The Norwegian Public Roads Administration (NPRA) presented Sotra Link as the winner of the contract on september 7th.
In competition with ITIAS, the NPRA chose Sotra Link. The two suppliers submitted their final bid on the second of August this year. Sotra Link had the best price-quality ratio.
- The bidding process with the two bidders has been effective and constructive. Through several months of hard work, the suppliers have shown significant commitment to implementing the rv 555 Sotrasambandet PPP contract. Sotra Link had the best bid price and received the most deductions for the added value they bring into the project, says project manager Arve Tjønn Rinde.
The Storting approved three PPP projects
In Prop. 1 S (2014–2015), the Government announced it would request the Norwegian Public Roads Administration to start planning three PPP projects. Rv 555 The Sotra connection was one of these.
The Norwegian Public Roads Administration's largest single contract
The PPP contract (public-private partnership) awarded to Sotra Link has a value of NOK 19.8 billion. Sotra Link will finance, design, build, operate and maintain the road system for 25 years after the opening to traffic in 2027. The contract is the largest single contract entered into by the Norwegian Public Roads Administration and the largest PPP contract awarded in the EU in 2021. The project's total value is estimated at NOK 23.1 billion (2022 NOK), including the preparatory works ongoing since 2018. The final budget will be confirmed after parliamentary deliberations in December this year.
Kjell Inge Davik, Director of Construction at the Norwegian Public Roads Administration, is delighted that the PPP contract has been awarded.
- Sotra Link has delivered a very competitive bid for the Sotra connection-contract and takes on considerable responsibility and risk for the project to be carried out at the agreed time and price. The companies behind Sotra Link have extensive experience with implementing PPP contracts and extensive experience with the construction of suspension bridges and tunnels. We look forward to a close collaboration with Sotra Link for many years to come.
Effective implementation plan
Sotra Link has delivered an effective implementation plan and will soon establish a project organization locally.
- This is very proactive by Sotra Link and helps create security around the traffic opening date of the four-lane road system in June 1. 2027, says Kjell Inge davik, Director of Construction at the NPRA.
Three international companies own Sotra Link. The Australian investment bank Macquarie Group Ltd, headquartered in Sydney, has a 70 percent stake. The South Korean civil engineering company SK Ecoplant Co. Ltd has a 20 percent ownership interest, and the Italian industrial group Webuild S.p.A holds 10 percent on the ownership side.
Among the companies, Sotra Link has associated within consulting and engineering are the Norwegian offices of Norconsult and Multiconsult. In addition, the companies PINI from Switzerland, FCC from Spain and Intertoll from Hungary are involved in implementing the project.
- Through the tender process, we have already been made aware that Sotra Link has included several Norwegian contractors, raw material suppliers, and subcontractors in the implementation of the project. Such a large project has a dire need for local and national contributors in project implementation. As we see it, Sotra Link has done an excellent job and established a close collaboration with several local contributors, says project manager Rinde.
Need for increased budget
When the Norwegian Public Roads Administration received the final bid for the contract at the beginning of August, it became clear that none of the submitted bids were within the budget limits of NOK 17.5 (2022 NOK) for the PPP part. Last week, Minister of Transport and Communications Knut Arild Hareide announced that the Government would request the Norwegian Government for an increased budget for the project.
The cost increase is mainly due to challenges associated with increased raw material prices through the corona pandemic and partly due to greater risk embedded into prices from subcontractors. In addition, Sotra Link is planning a lifetime upgrade around years 12, 17 and 23, which is a significant contribution to maintaining the quality of the road system until the return of the system in 2052.
The Government will request the Storting to increase the financial budget for the project to NOK 23.1 billion (2022 NOK). The current budget for the entire project is NOK 19.5 (2022 NOK). The cost increase for the project is NOK 3.6 billion (2022 NOK). The case will be processed by the Storting in December this year. The contract willt be signed early next year.
About the project:
New Sotra connection includes the construction of 9.4 km four-lane road from the intersection with fv. 562 at Storavatnet in Bergen to the junction with fv. 561 at Kolltveit in Øygarden municipality. About 4.6 km goes in a tunnel. The project includes a new four-lane bridge of about 900 meters, with a separate pedestrian and bicycle path. The new road system will have lanes and ramps for public transport and pedestrian and bicycle paths. New parking and public transport terminals will be built on Straume and at Storavatnet. Three smaller bridges are also included in the project.