Case Studies: Gardermobanen, Norway

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Project Overview
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Figure 1:Gardemoen Line, Norway
Gardermoen Line – Airport Express train, Norway
Project Type: Both
Type of Project Financing: Public
Contract duration: 6 years (Construction finished in 1999)
Budget: The original construction budget 575 million EUR (4,9 billion NOK).
Project Time Line
1992: The government established Gardermobanen AS as part of the decision of the new airport. The estimated return on investment was to be 7,5% return. Main planning and design started.
1994: Construction start, to be finished until 1999.
1997: Severe leakages in new tunnel. Extra costs of 150 million EUR.
1998: Postponed end date for tunnel, trains used the old track for local trains as a start.
1999: Tunnel opens at end of year. Big success from the 1stday.
2000: Debt situation, organization and ownership decided by government. Flytoget (Airport Express train) as an owner of all above rail lines, pays charge to Jernbaneverket for operation and maintenance that owns the track and rolling stock.


Introduction

Gardermobanen is a high-speed railway line, connecting the city of Oslo to the Gardermoen Oslo Airport. The line is 64 km long and replaced the older Hoved line as the main line northeast of Oslo. The older line now handles commuter and freight traffic, while the Gardermbanen handles high-speed passenger trains and freight trains laden with jet fuel for the airport.

Gardermobanen AS is a state owned share holding company, which was established in 1992 to develop high-speed (speed limit 210 km/hour) transportation between the Oslo Central Station and the new Gardermoen airport. The high -speed connection was decided by the Parliament of Norway in 1992. The project followed the decision to move the airport from Fornebu to Gardermoen, which is located 50 km from the Oslo centre, as the old airport could not be further extended due to lack of space. The high-speed line contributed to the decision of changing the airport location providing quick access within 20 min.

Gardermobanen is integrated in the tracks of the Intercity triangle around Oslo (Skien, Moss-Halden, Lillehammer). Gardermobanen is the shortest line from the airport to the Oslo Central Station.

The line is of 64 km total length, including a tunnel of 14,5 km and an extension further north to Eidsvoll. The Airport Express train reaches Oslo Central Station from the airport in 19 minutes. The strongest commitment to support the project by the parliament was that the costs of construction should be borne by operators and not taxpayers. In 1992, Norwegian State Railways established Gardermobanen AS to construct the line and later on in 1996 to operate the train. The name was then changed to Flytoget AS.

Construction started in 1994 and was completed in 1999. The longest railway Romeriksporten tunnel (14,580m) was a part of the project. During the spring of 1997, leakages came into the tunnel and a huge amount of extra works to stop them was carried out. This led to a delay of one year, but in the meantime, trains operated on the old track.

In 1996, Parliament decided that the development company, Gardermobanen AS, should also be the operator. Pricing became an issue in 1996 with discussions between NSB Gardermobanen and counties politicians. The expectations from the operator were too high (the price was almost doubled), in comparison with the other prices for the same route. The stakeholders for this project are users, companies involved in the project, municipalities and the government (Ministry of Transport).

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Figure 2: Gardermoen Line

The total budget was 575 million Euro due to the problems and other unexpected expenses. Other transport mode infrastructure was included in the project, as well as rolling stock. The tunnel formed part of the new rail track. The construction included also the new station at the new airport. Upgrading of other works were included in areas at Central Station in Oslo and at a station in-between.

The Contracting Authority (Public Party)

The contracting authority is Gardermobanen AS, a state owned sharing company, which was established by the government to manage and develop this project and later to operate it.

Sources of Financing

The project was financed through the public budget of the Republic of Norway (public projects) with a credit guaranteed by the state. Investment comes directly from Government after approval in Parliament. The project was financed 100% by funds from the annual state budget. All the main plans were approved by Parliament. Operation and Maintenance is covered by user charges and tax sources.

The original budget was 575 million EUR (4,6billion NOK). The total costs of 674 million EUR included:

  • Extension to Eidsvoll: 175 million EUR (1,4 billion NOK)
  • Rolling Stock and preparation for operation: 175 million EUR (1,4 billion NOK)
  • Financing costs: 112 million EUR (0,9billion NOK)

The added costs due to heavy leakage in tunnel and others are as follows:

  • Tunnel: 162 million EUR (1,3 billion NOK)
  • Other unforeseen costs: 50 million EUR (0,4 billion NOK):

Users

The high-speed connection serves the airport. Fares are higher than for the local train, so passengers for other destinations may use the local train or the intercity train, which also stop at the airport.

Key Purpose for Public Financing Model Selection

All airports and rail in Norway are owned by the state. It is usual that state covers the investments for the infrastructure projects. Extensions of existing airports are financed by AVINOR, a state owned company with the role to operate and develop a national network of airports for the civilian sector and joint air navigation services for the civilian and military sectors.

Project Timing

The project was constructed at that time, due to a decision of the government to move the airport from Fornebu to Gardermoen, which is located 50 km out of Oslo. An express rail link to the capital was, therefore, considered necessary.

Project Locality and Market Geography

Gardermobanen is a node for the express train, and a number of regional trains running north of Oslo (Trondheim, Lillehammer-Vestfold, Eidsvoll-Kongsberg). It connects several cities north of the airport, through Lillestrøm, Oslo and further west to the city of Drammen.

The level of economic activities in the region has grown since project inauguration, including tourism and exhibition activities. Mostly favoured is Lillestrøm (a station between airport and Oslo), with an increased number of international conferences and exhibitions due to ease of access, new hotels and exhibition areas.

Procurement & Contractual Structure

There were open public tenders for all phases of investments (design, build), as well as several design and construction calls and contracts. Some of them were combined (design and build). The following companies were involved:

  • Design companies: Aas-Jakobsen (3 contracts), Multiconsult-Grøner, OHAS (Oslo Hovedflyplass AS), FjellangerWiderøe.Design
  • Building companies: Reinertsen (2 contracts), Bruer AS, AF Spesialprosjekt-Hochtief.
  • Construction companies: SRG (Scandinavian Rock Group) as a joint venture with AF (Maalselvanlegg - NOR Entreprenoer - Fagbygg - PEAB Entreprenad Vest); Veidekke; AF NCC / Eeg-Henriksen.

The main planning phase includes 10 contracts, the construction phase 4 contracts and MOM (management, operation and maintenance) 2 contracts. The “Airport express train” is responsible for MOM for trains, while Jernbaneverket (Norwegian government’s agency for railway services) is responsible for tracks, stations, and the tunnel.

Risk Allocation

Risks were shared. Design and construction risks were mostly on the contractor side and risk assessment was acceptable. Maintenance and exploitation risks are totally public and risks assessment is moderate. Commercial and financial risks are totally public, but user charges cover the costs of construction and operation. Regulatory risks and force majeure are totally public. These are depicted in Figure 3.

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Figure 3: Risk allocation

Performance

The indicators which were used for the evaluation of different stages of the projects were time schedule, project finance, quality checking and users’ satisfaction. Reliability was measured by ex-ante and ex-post share of delayed traffic. Availability was in accordance with the project expectation already in 1998. The project was inaugurated on time with a limitation that the part of the old track was used during the first year, due to the construction problems in the tunnel. The tunnel was opened one year later in 1999. Maintainability was measured by ex-ante and ex-post maintenance costs. Safety was measured continuously and no accidents have occurred to date. Cost of investment was almost 25% higher than expected, due to the leakages in the tunnel, and the project time line was extended for a year. Ridership has increased over the years and is greater than the forecasted number of passengers to the airport.

Project Outcomes

The project is a success due to it finishing in time (except from the tunnel), achieving the goal of transportation time between the airport to Oslo in less than 20 min. It needs only 19 minutes to access the Oslo Central Station, with a service every 10 minutes. It provides an express link compared to other modes (by car: 35 min, by bus: 50 min). The line is open 20 hours per day and a one-way ticket costs 19 Eur (180 NOK). The cost for taxi is 93 Eur (105 NOK) and bus 16 Eur (150 NOK). The rate of user's satisfaction is 96%. There was also a high economic impact with the increase of business activities in the area.

References