How many cars and trains are expected to drive across the fixed link per day?
Lessons learned from the Great Belt and Øresund links show that traffic grows significantly when a fixed link replaces the ferry services. This is due to the new opportunities that arise in terms of time saved, increased flexibility and greater accessibility. Traffic increased by 61 per cent and 127 per cent on the Øresund and Great Belt links respectively in the first year after opening. This is the so-called traffic jump.
In order to be conservative in relation to the project finances, traffic on the Fehmarnbelt link is projected to grow approximately 40 per cent. In addition, the financial analysis has assumed that this traffic jump will only be realised gradually over four years. Femern A/S has therefore assumed that the traffic projection on the Fehmarnbelt will be much lower than at the Great Belt and the Øresund.
When the link opens, an average of 8,000 vehicles are therefore expected per day in the first year. Five years after the opening, the number is expected to be in the region of 10,800 vehicles per day. In the forecasts, Femern A/S has assumed that traffic will grow with 1.7 per cent annually for the first 25 years after the opening of the link and then remain on level that has been reached by then.
For the rail link, a significant increase in the number of freight trains is expected, with an estimated 40 passenger trains and 78 freight trains per day five years after the opening.
Do the traffic forecasts take account the possibility that the ferry services between Rødby-Puttgarden will continue?
The traffic forecasts do not assume the ferry operations between Rødby and Puttgarden to continue following the opening of the fixed link. It is up to the ferry companies to decide whether to continue operations in the future. Experiences from Great Belt and Øresund show that the ferries ceased sailing soon after the opening of the fixed link.
Will a construction site near Puttgarden mean longer traffic jams than today before the Fehmarnsund Bridge and hinder the island’s accessibility for tourists?
Not in general. By far the greatest part of the materials needed for the construction site of the tunnel portals next to the existing ferry harbour in Puttgarden will be transported there by sea. For this reason the construction site there will have a worksite harbour of its own. It is expected that on average 50 lorries per day will be required to deliver material to the construction site – some more in the beginning until the completion of the work harbour, some less afterwards. Compared to the average of more than 950 lorries that are already,transported by the ferries on a daily basis today, this will therefore not cause significant extra congestion on the Fehmarn sound bridge.
What will the fixed link cost?
Prior to the implementation of the EIA (Environmental Impact Assessment), construction costs for an immersed tunnel are estimated to be in the region of EUR 5.5 billion. For the Danish landworks, construction costs are estimated at approx. EUR 1.1 – 1.2 billion. The construction costs are calculated in 2008 prices and can be subject to change in the further planning process.
Costs for the German land works will be paid by Germany. Construction costs are estimated to be a total of EUR 840 million (2003 prices). The German national railway company (Deutsche Bahn AG) is currently working on a new cost estimation for the railway. Cost may have to be added for the construction of a second link over the Fehmarn sound, which the government of Schleswig-Holstein supports.
The economics of the Fehmarnbelt tunnel depend very much on financing costs, since the project is funded by loans. This is where for example the business cycle comes into play. Due to the recent years of economic downturn, the interest rates level is well below the rate assumed in the financial analysis of the project In this regard, the economics of the Fehmarnbelt project are currently more favourable than expected. However, Femern A/S needs to think long term, when working with such a large and far-reaching project. Therefore, the long-term interest rate assumptions will not be changed at this point.
Are the costs reliable? All other construction works exceed the estimates.
Yes, the cost estimate is reliable. Femern A/S believes that the estimated construction costs for the coast-to-coast project from November 2010 (updated in June 2011) are realistic. It should, however, be pointed out that additional costs may arise as a result of the requirements stemming from the authorities' environmental assessment and approval of the project. In addition, the contractors' tenders for the construction works will reflect the current market situation in the construction industry.
Has the financial crisis changed the perspectives for the Fehmarnbelt fixed link?
Irrespectively of the financial crisis the long term prognosis/perspectives are the same. Periods of low economic growth in society typically result in less traffic, but also lower prices of construction works and a lower interest rate level, for example. Financing expenses in Denmark and for the Fehmarnbelt project are very low for the time being.
Furthermore, the fixed link between Denmark and Germany is one of the world's system-changing mega projects. The change to infrastructure and accessibility generated by the link has the potential for creating a new economic, cultural and social development in the regions and countries surrounding the link.
How strong is the business case?
The fixed link will be financed by loans and repaid by the users. The economics of the project have been assessed by means of a financial analysis, which is a calculation of costs and revenue in respect of the establishment and operation of the fixed link, including the Danish road and rail facilities on land. The result is expressed in the form of a repayment period for the debt. The repayment period has been calculated at 39 years, which is regarded as satisfactory for a construction project of this nature.
Who will pay for the fixed link across the Fehmarnbelt?
The users of the link, not the tax payers, will pay for both the coast-to-coast link and the Danish landworks. The fixed link across the Fehmarnbelt will be financed by loans guaranteed by the Danish state as well as subsidies from the EU. The loans will be repaid from user payments, as is the case on the links across Great Belt and Øresund.
How are the fees for using the railway connection determined?
The fees for using the railway section of the Fehmarnbelt Fixed Link are determined – after consultations with the regulating German authorities – by the Danish Minister for Transportation. The financial analysis for the Fixed Link from 2008 assumes that the railway services generate approximately EUR 47 million in revenues (2008 prices) per year.
How long will it take to pay back the costs of the fixed link and the Danish landworks?
The repayment period for the coast-to-coast section of the link is 33 years for an immersed tunnel. If the Danish landworks are included, the repayment period is 39 years.
How will it affect the repayment time if the assumptions for the calculations fail to hold good?
All assumptions are determined on the basis of a cautious estimate, i.e. there is a strong probability that the repayment period can be shortened as a result of lower interest rate levels, higher EU subsidies or higher traffic revenue.
Will the fixed link receive subsidies from the EU?
The EU has decided to support the Fehmarnbelt Fixed Link through the TEN-T programme (Trans-European Network) and award funding in the amount of approx. 267 million EUR for the period 2007-2013. An additional approx.12 million EUR were accorded for feasibility studies for the Danish landworks. The Fehmarnbelt Fixed Link will be an important Northern European traffic corridor. Therefore, EU subsidies from the TEN-T programme are also expected in the next budget period between 2014 and 2020, where subsidies will be directly related to the construction phase.
Why did the EU reduce subsidies to the fixed link across Fehmarnbelt in 2010?
In the course of its Midterm Review in 2010, the European Commission has evaluated all EU subsidy projects that are part of the TEN-T programme. Due to less construction activities in the period from 2007 to 2015 than earlier expected, the Midterm Review proposed a reduction of the subsidy to the Fehmarnbelt Fixed Link by about EUR 72 million. As a consequence, financial support was reduced from 339 million EUR to 267 million EUR. In 2012 Femern A/S announced a delay in the approval process which postpones the start of construction phase. The implication on the EU subsidy is a reduction within the current funding period to 194 million EUR. It is expected that the reduced subsidy in the current funding period will be recovered in the next funding period from 2014 to 2020, when the construction activities will take place. The strong EU support for the Fehmarnbelt Fixed Link thus remains intact and unaffected by the reduction of support in the current program period.
What will it cost to drive across the Fehmarnbelt Fixed Link?
The prices have not yet been determined, but it is anticipated that the price will be on a level with the Rødbyhavn-Puttgarden ferry service's prices in 2007. Adapted to the price level of 2008, the cost of a single crossing by ferry was EUR 54 (DKK 400) for a passenger car. These numbers were used in Femern A/S’s financial calculation of 2008.
The anticipated price for a single crossing of the Fehmarnbelt Fixed Link is lower than the current price with Scandlines for a standard single crossing by ferry (EUR 67 or DKK 499 in November 2012).