Case Studies: “Herrentunnel”Lübeck, Germany

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Project Overview
Lubeck1.png
Figure 1: “Herrentunnel” Lübeck, Germany
Source: http://www.luebeck.de/tourismus/sightseeing/sehenswuerdigkeiten/bruecken/images/herrentunnel.jpg
Herrentunnel Lübeck
Project Type: Brownfield
Type of Project Financing: Public Private Partnership
Contract duration: 30 years
Budget: € 180 million (2005)
Project Time Line
07.03.1997 European-wide inquiry, prequalification and preparation of tender
21.10.1997 Invitation to tender
12.03.1998 Tender, tender evaluation
29.10.1998 Announcement of the preferred bidder with subsequent contract negotiations
12.03.1999 Signature of concession contract [date of contract award]
13.09.1999 Submission of planning approval documents
December 1999 Initiation of the project approval procedure
February 2001 Planning resolution
Mid of October 2001 Construction begins
End of August 2005 Operating begins
End of 2005 Completion of construction work & Deconstruction of the “Herrenbrücke”
2035 “Herrentunnel” ceded to the city of Lübeck

Introduction

The “Herrentunnel” is a tunnel situated on a federal highway (Bundesstraße) that connects the inner city of Lübeck with one of its outer districts, Travemünde. Travemünde is located about 20 km away from the city center. Since the two cities are separated by the river Trave, their main connection has been a bridge–the so-called “Herrenbrücke”.In 1995,the deterioration of the “Herrenbrücke”hadbeen detected, and the city of Lübeck decided to replace the bridge witha tunnel instead of repairing or renovating the bridge. The construction of thisso-called “Herrentunnel” was one of the first public private partnership (PPP) projects realized according to the F-model for PPPs forGerman federal roads. The concessioner, responsible for building, financing and operating the bridge, is the consortium ofBilfinger Berger and HochTief (50% each). The road section containing the tunnel has a total length of 2.1 kilometers, of which 780 meters are actually in the tunnel.

The concessioner won the Europe-wide tender initiated by the city of Lübeck in 1997 and signed the PPP contract in March 1999. In December 1999, the plan approval procedure started with the official approval following in February 2001.

Construction works began in October 2001 and the tunnel was finished at the end of August, 2005. The“Herrenbrücke” was dismantled atthe end of 2005. The concession period has been determined to 30 years, therefore, the tunnel will be returnedto the city of Lübeck in 2035.

According to Bilfinger Berger, the construction cost comes to a total of 134 Mio euros. Since the construction and maintenance of a new bridge would have cost the German Federal Government an amount of 90 Mio €, it contributed this amount to the construction of the “Herrentunnel”.

In order to refinance the project, tolls are charged to all tunnel users. Toll fees differ depending on the type of vehicles: Cars (with or without trailer) and motorbikes are charged €1.2, whereas pickups, vans and minibuses with only two axles €2.3. Buses and trucks with three axles are charged €6.0, and trucks with four or more axles €9.5.For all classes of vehicles, discounts are available for the Quick-box electronic toll used by frequent drivers. Pedestrians and cyclists can pass the tunnel using a shuttle bus free of charge.

The Contracting Authority (Public Party)

The “Herrentunnel” project is a locally driven, public private partnership (PPP) project, realized according to the F-model for PPPs for German federal roads.The city of Lübeck– appearing as the contracting authority– has signed a contract with the the concessioner (consortium of HochTief and Bilfinger Berger) in 1999, in order to replace the old, dilapidated bridge with a tunnel.

This is a non-standard contract based on the “Fernstraßenbauprivat-finanzierungsgesetz”. The later is a German law for private financing of transport infrastructure, which has been passed in 1994 in order to regulate the construction and operation of federal highways for private partners.It is evident that the German Federal Governmenthas increased its political support towards PPPs with the passing of this law. Therefore, at the moment of contract award in 1999, there was a clearly communicated commitment towards PPPs.

The Private Party

The “Herrentunnel” project is co-financed by the German Federal Governmentand the concessioner, Herrentunnel GmbH & Co. KG.

As already mentioned, the German Government has contributed 90 Mio euros to project financing. This corresponds to 50% of the total project value.Herrentunnel GmbH & Co. KG have contributed 18 Mio eurosin equity, and 18 Mio euros in debt (equally contributed by shareholders HochTief and Bilfinger Berger).The remaining 54 Mio euroscomprise of 27 Mio euros commercial debt and 27 Mio euros Kfw debt.

Hence, total equity (excluding subsidies) comesto €18 million, i.e. 10% of the total sum.

Users

The main users of the “Herrentunnel” are car and truck drivers. Therefore, the type of usage can be described as mixed.Next to cars and trucks, pedestrians and cyclists can pass the tunnel using a shuttle bus free of charge.

In addition to the users, there are several other stakeholders involved in the project, such as the city of Lübeck, Bilfinger Berger and HochTief.

Key Purpose for PPP Model Selection

When the deterioration of the “Herrenbrücke” was detected in 1995, the city of Lübeck decided to replace the bridge with a tunnel instead of repairing or renovating the bridge. But since the German Federal Government only had to contribute the amount for constructionand maintenance ofa new bridge, the responsible parties paved the way for private co-financing.

Therefore, the F-model as a special Build-Operate-Transfer- (BOT-) model was chosen.

Project Timing

At project award, the unemployment rate was 12.9 %in the city ofLübeck. This decreased by 2.5% to 10.4% in 2014.

Project Locality and Market Geography

As the “Herrentunnel“ connects Lübeck’s inner city with one of its outer districts, Travemünde, the project locality can be described as urban.

Procurement & Contractual Structure

This section describes the tendering process and the contractual structure of the “Herrentunnel” project.

Tendering

After the Europe-wide call for tender in March 1997, four tenders were submitted to the city of Lübeck,following a prequalification stage. The tenders had to provide three different options to replace the crossing over the Trave River. The winners, the consortium of Bilfinger Berger and HochTief, proposed the following three plans: a cut and cover tunnel, a shield driven tunnel and a high bridge. The shield driven tunnel was chosen as the most suitable option to satisfy traffic and environmental requirements.

Contract Structure

The project has been realized following the F-model for federal roads (Bundesfernstraßen). The F-model is a Public Private Partnership model that applies to bridges, tunnels or mountain passes and whose legal foundation is the Fernstraßenbauprivatfinanzierungsgesetz. The concessioner is responsible for the design, construction, financing, maintenance and operation, as well as transferring the tunnel to the public authority after the concession period of 30 years.

According to the available information, no standard concession contract has been used.

Risk Allocation

According to the F-model all design, construction, maintenance, exploitation, financial, revenue and regulatory risks have to be taken by the contractor, as depicted in Figure 2. In the case of the project at hand, the incorrect anticipation of revenues has led to catastrophic results. All other risks can be described as moderate or acceptable.


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Figure 2: Risk allocation

Performance

With respect to performance, the “Herrentunnel“ project’s revenues have fallen short of expectations as the traffic volume has been much lessthan forecasted. Because of this, tolls have already been increased four times. For 2016, a fifth increase has been announced. As the revenues have been so little in the past, the parties agreed on extending the obligation of paying tolls until 2045.

No performance indicators have been mentioned in the contract.

Project Outcomes

Even though the construction cost or time did not exceed expectations, one critical failure factor is the above mentioned serious miscalculations regarding traffic volume: As the demand for the tunnel has been much lower than forecasted, tolls had to be increased several times. The continuous elevation of the tolls, however, reduces traffic levels even more, especially as there are alternative routes, such as the A20 motorways that do not include user charges.

It is, therefore, not surprising that Lübeck’s population prefers using the 5 km longer bypass. It can be assumed that this is also a type of protest.

References

The initial version of this wiki page has been produced within the framework of the BENEFIT project that has received funding from the European Union's Horizon 2020 research and innovation programme under grant agreement No 635973

  • www.herrentunnel.de, last accessed: 24/06/2015