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Construction — The government now recognizes that the delayed Niels Bohr Building will cost at least 10 per cent more than budgeted – an extra bill that will end up being paid by the University of Copenhagen (UCPH). Unions criticize the government property agency for not learning from its mistakes and for using a cheap construction company
The great, delayed, construction that is to house the University of Copenhagen’s (UCPH) scientific research will be at least DKK 160 million more expensive than it should be. This is according to the trade magazine Ingeniøren.
The information about the increased costs of the planned DKK 1.6 billion building can be seen in a letter from the Minister for Transport, Building, and Housing to the parliamentary Finance Committee from 17th March.
The Finance Committee has a right to be notified if government construction projects are expected to be at least 10 per cent more expensive than planned.
According to the Minister’s statement, he has currently no overview of how bad things went wrong in the construction of the Niels Bohr Building, as this is being currently being examined by experts. What is clear is that the Danish Building and Property Agency, which is the government developer of the Niels Bohr project, had earlier this year sacked its contractor, the Spanish company Inabensa.
Senior researcher Kim Haugbølle from the Danish Building Research Institute at Aalborg University who is an expert on state construction projects, has told the University Post that it is rare that you get rid of a main subcontractor at an advanced stage of a building project, as this would typically be very costly.
The Danish Building and Property Agency has in an e-mail to the University Post written that the dismissal of Inabensa was due to “delays in the progress of Inabensa Denmark’s work and significant failures in the quality of the work that Inabensa Denmark had carried out already.”
It is worthy of note that Inabensa got the job in the first place, according to Blik & Rør Arbejderforbundet a trade union that organizes 9,000 employees in the plumbing industry. The union has been concerned about the project.
“It surprised us that Inabensa was DKK 71 million cheaper than their competitors when they made a bid for the job. This corresponds to the total wage sum on the contract,” says union secretary Allan Leegaard.
It cannot only be the contractor’s fault when the same property developer has so many repeat assignments. As an old craftsman, it makes me start wondering.
Allan Leegaard, Blik & Rør trade union
He also says that Inabensa was unable to find Danish plumbing companies that would carry out work at the prices that Inabensa had to offer. Inabensa therefore applied for, and received, a Danish plumbing license and brought in Portuguese and Spanish subcontractors for different parts of the project.
UCPH as a tenant
It is the Danish Building and Property Agency (under the Danish Ministry for Transport, Building and Housing) that builds and owns the University of Copenhagen’s and a number of other public institutions’ buildings. The University subsequently rents the buildings at a rate that is set by the price of construction. This leaves the University, as the Agency’s customer, stuck with the bill if the project goes wrong. It is a system that has been regularly criticized by the University’s board and rector.
The Building and Property Agency has recently constructed the Maersk Tower at the Faculty of Health and Medical Sciences and KUA3 on South Campus. The Agency’s projects include the building of an extensive – and delayed – plant research center in Frederiksberg. The Niels Bohr Building is the Agency’s largest single project.
Allan Leegaard reports that the Blik & Rør union is leading several cases in the commercial courts in connection with the construction, as the builders have, in several cases, not received the salaries and pensions that they, according to the union, were entitled to. Allegedly because the Danish Building and Property Agency had not paid the subcontractors that paid the workers.
“The people I have talked to about what has gone wrong there, they say that the builders have had to redo lots of things,” says Allan Leegaard.
He also says that he wonders why the Property Agency projects are repeatedly hit by delays, and refers to the KUA construction in the Amager district, and the recently inaugurated Maersk Tower at Panum. Both of these were more expensive than expected, and delayed.
“It cannot only be the contractor’s fault when the same property developer has so many repeat assignments. As an old craftsman, it makes me start wondering,” he says.
The Danish Building and Property Agency has declined to provide an estimate of the final cost of its delayed construction projects.
According to the Minister of Transport’s explanation to parliament 17th March, “it is not possible for the Agency to assess the impact on the timescal or finances for the entire building, as the further process and the necessary agreements on how the Agency will complete the remaining plumbing and ventilation contracts have not yet been finalised.”
The University Post had, earlier this year, requested access under the Freedom of Information Act into the Agency’s projects at the University of Copenhagen and received an overview of the five major projects on university campuses.
It appears from the overview that the Agency cannot, or will not, state the expected final budget for any of the buildings. The reason is, according to the Agency, that all five building projects are subject to legal disputes.
In November 2015 the Danish Building and Property Agency stated what they expected that the additional price for the buildings would be:
Niels Bohr Building: No expected overrun. (Now: at least DKK 160 million.)
KUA3: Expected overrun of about DKK 50 million.
Copenhagen Plant Science Building1 – CPSC1: expected overrun of about DKK 2.6 million.
Pharma Science Building: Expected, overrun unknown.
Maersk Tower: Expected, overrun unknown. (The budget for Maersk Tower was in November 2015 still not a secret, as it was revealed in the March 2017 overview. The budget was in 2015 a total of DKK 1,542.6 million.