Majestic buildings ended up as gaping wounds

Kim Haugbølle launches into metaphor when I ask him why the construction scandals have arisen at the University of Copenhagen.

You can look at a construction project as a porcelain figurine, he says, hanging by a series of rubber bands, swinging from the ceiling, but in no danger of falling. Every time something goes wrong with the building process, it is as if one of the rubber bands breaks, and things gets more bouncy for the figurine hanging down from the ceiling. But it does not fall down, as there are enough rubber bands to keep it up.

»But the more the rubber bands burst, the more the project bounces, the worse it usually gets for the project until at last the final rubber band breaks, and then the figurine just crashes to the floor,« says Kim Haugbølle, a senior researcher at the Department of the Built Environment at Aalborg University.

It goes for all building projects that it is difficult to finish without breaking any rubber bands.

But the elastic tend to end up snapping in a terrible chain reaction when the construction takes place at the University of Copenhagen.

The obvious example is the Niels Bohr Building, which has ended up as one of the biggest building scandals in modern Danish history. Five years after the building was scheduled to open for 4,000 researchers and students, the laboratories are still empty. The construction workers are struggling with some tricky fire seals (seals that prevent fires from spreading). The glass façades that were supposed to proudly shine are all dirty and dusty. And the budget has ballooned out from DKK 1.8 to DKK 4.6 billion.

But the Niels Bohr Building is not the only prestige building at the University of Copenhagen that has ended in dire straights.

The Plant Science Centre was handed over to the university with laboratories that were so defective that they are still empty four years later. The Pharma Science Building is plagued by errors and costs that the University of Copenhagen has to pay for (according to a ruling in a court of arbitration), and the rent for the Maersk Tower has doubled from DKK 29 to more that DKK 63 million per annum (which is something that UCPH is testing in another arbitration case).

This is extremely frustrating

Uffe Gebauer Thomsen, Deputy Director of Campus Service, UCPH

 

The thing that all the projects have in common is that they are advanced – and architecturally impressive – laboratory buildings with ventilation, cleanrooms, fume hoods, etc. and the Danish Building and Property Agency has not been able to manage the projects.

There are indications that they have not been humble enough in their approach to the projects .

»In these types of projects it happens again and again that they have not properly identified the potential risks, and have not allocated enough funding to handle the changes that are made along the way,« says Kim Haugbølle.

The Danish Building and Property Agency has not wished to be interviewed for this article. But on their website, the agency agrees, in part, with Haugbølle:

»The task of building a complex, high-tech laboratory building was fundamentally underestimated, and underbudgetted, right from the start of the project in 2010,« it states.

We will take care of this in a jiffy!

Over-optimism is a general problem in public building projects, according to Søren Wandahl, a professor in construction management at Aarhus University.

The Danish researcher Bent Flyvbjerg dubbed the phenomenon ‘optimism bias’. They tend to say »it won’t cost much,« and »we will take care of this in a jiffy!« instead of appraising the challenges realistically.

It is part of the human condition, but it is also an incentive in the funding system. It is easier to get funding for an under-budgeted rather than an over-budgeted project because, well, because the stated, up front cost is lower.

The problem is repeated in the calls for tender on individual projects. The Spanish contractor Inabensa won the plumbing and ventilation task at the Niels Bohr Building, for example, partly because they claimed that they could do it for DKK 51 million less than the second lowest bid. They then set up some useless installations that had to be dismantled again, a total 2.5 kilometres of ventilation piping.

There is a lack of realism, at times, according to Søren Wandahl.

And the clients’ ability to listen can be found wanting also.

»There are very specific requirements for technical installations which often don’t make sense to anyone else than those who need to use the laboratories, cleanrooms, etc. And as a university employee, I have often experienced a lack of user involvement of students and researchers,« says Søren Wandahl.

The miracle cure?

The question is whether things would have been any different if the University of Copenhagen had owned its own buildings? The university has campaigned to own its own buildings on a freehold basis for years. Only to be let down by politicians who got cold feet as soon as they entered government and found out that the current leasing model is a lucrative source of revenue.

Is freehold a solution? Why not ask them that have it?

I call Jacob Steen Møller, a now retired campus manager at the Technical University of Denmark (DTU), who was co-recipient of a prize as developer of the year in 2020 – only two weeks after the Danish National Audit Office released a scathing criticism of the Ministry of Transport and Housing’s running of the Niels Bohr Building project.

Roughly speaking, DTU builds itself, and owns, what they build. And this is an advantage, according to Jacob Steen Møller.

As a university employee, I have often experienced a lack of user involvement of students and researchers

Søren Wandahl, Professor in Construction Management, Aarhus University

 

»This means that the full responsibility, and the full risk, for actions taken are at the university. They can quickly make decisions and respond to changed conditions or new researcher requirements.«

Jacob Steen Møller mentions how DTU at one point stopped a planned building project, just before construction started. They chose to take on the loss. The question is whether this would have been possible if the state had been the developer? Who would have footed the bill?

»Serious decisions can be taken very quickly. Simply put: Disputes between users and developers end up in the same place — with the rector. If the professors are dissatisfied with something, they turn to the rector. The same is the case with the builder, and everything goes quickly.«

Kim Haugbølle does not see freehold as a miracle cure. According to him, even if the University of Copenhagen had been responsible for its own building projects, this would be no guarantee that it would have all ended up running smoothly.

»We can all make mistakes. We can all accidentally cut the rubber band, or not notice that one of them is about to break, and thereby end up in a situation that is very similar to what happened with the Niels Bohr building.«

Billion-kroner slap in the face

But this does not mean that Kim Haugbølle is in favour of the current model that the University of Copenhagen is now subject to. Not at all.

The problem is that the model gives responsibility for the building to the party that does not have to pay the bill if the project’s budget gets derailed.

In all of the buildings hit by scandals, the University of Copenhagen and the Danish Building and Property Agency have entered into dialogue-based agreements, which means that the University of Copenhagen can order changes along the way. In return it has to pay up for any extra expenses in the form of a higher rent.

This is not a sound model

Kim Haugbølle, senior researcher at the Department of the Built Environment, Aalborg University

 

It is no insignificant detail that when one of the buildings ended up being DKK 2.8 billion more expensive, it was partly due to »poor management« of project changes, according to a critical report from the National Audit Office in October 2020.

»When you have a leasing model, which means that it does not matter what the builder does because the bill ends up with the tenant, then the tenant can’t do much, except wait for the rent to get bigger and bigger. It is not a sound model,« says Kim Haugbølle.

The University of Copenhagen agrees.

Uffe Gebauer Thomsen, deputy director of Campus Service at the university, says that it is precisely the »completely skewed incentive structure« that is the reason why the building projects fail again and again, with consequences for all of society.

»This is extremely frustrating,« he says.

»This is bad for the University of Copenhagen, for the state, and ultimately for the business community and the taxpayer.«

On their website, the Danish Building and Property Agency also point to the shape of the contract as a reason why they did not optimally manage the Niels Bohr building project. The Minister of Transport Benny Engelbrecht (S) has now decided that as a general rule, dialogue-based agreements should not be used in the future.

Massive layoffs ahead

The Niels Bohr Building looks, right now, to be completed in July 2022. This is at least according to the new construction client, the Danish Road Directorate. And you have to decide whether you want to believe them this time round.

No matter what, a gigantic bill is on the way, either to the University of Copenhagen — or to the taxpayers. After a long period of hesitation, the Danish government just stated that it will step in to rescue the university in the wake of the Niels Bohr Building scandal. The university will now only have to pay the original rent of approximately DKK 91 million a year – plus cost increases resulting from requests by the University of Copenhagen itself — pending the results of several arbitration cases in court.

As early as 2020, university director Jesper Olesen said to the University Post that the construction scandals could cost more than 400 jobs.

The dream of world-class research in state-of-the-art buildings may come true in the end. In the Maersk Tower, a research team has already developed a possible vaccine against the coronavirus.

But the buildings have become so expensive, that they will take the shine off the University of Copenhagen for many years to come.