Construction Act on the Fehmarnbelt link passed by the Danish Parliament

A majority in the Danish Parliament has today adopted the bill for the Act on the construction and operation of a fixed link across the Fehmarnbelt with associated landworks in Denmark and the bill for the Act amending the law on Sund & Bælt Holding A/S, the Act on the planning of the fixed link across the Fehmarnbelt with associated landworks in Denmark and the Corporation Tax Act.

The Act on the construction and operation of a fixed link across the Fehmarnbelt with associated landworks in Denmark” authorises Femern A/S and A/S Femern Landanlæg to construct and operate a fixed link across the Fehmarnbelt and associated landworks in Denmark.

The Acts can be viewed at the Danish Parliament’s website: www.ft.dk

The coast-to-coast project will be implemented as a four-lane motorway with emergency lanes in both directions and a double-track electrified railway running through an approximately 18 km long immersed tunnel. Toll facilities will be located on the Danish side of the tunnel.

The upgrading of the Danish railway landworks will include the expansion of the Vordingborg to Masnedø and Orehoved lines to the south of Holeby to double track. The lines from Ringsted to Masnedø and from Orehoved to south of Holeby will be electrified and upgraded to allow passenger trains to travel at up to 200 km/h. Finally, there will be a new double-track bridge over Masnedsund and a single track bascule bridge over Guldborgsund. Banedanmark is expected to be given the role of developer of the Danish railway landworks.

As shown in the comments to the Construction Act, the reassessment of the overall economics of the project, including an updated risk assessment, will be submitted to the political parties behind the Fehmarnbelt project in the autumn before construction work can begin. The political parties will, in this context, also have to consider the further progress of the project in the event that the German regulatory approval is not yet available. Reference is made in this respect to the general comments on the bill, section 11.2.1.

The Act amending the law on Sund and Bælt Holding A/S, the Act on the planning of a fixed link across the Fehmarnbelt with associated landworks in Denmark and the Corporation Tax Act repealed the special tax regulations, which currently affect Sund & Bælt Holding A/S, A/S Storebælt, A/S Øresund, Femern A/S and A/S Femern Landanlæg. These special provisions deal with loss carryforwards, depreciation rules and tax exemption on free transfer of loans between the companies. The repeal of the special rules means that all companies in the Group should follow the general tax rules from 1 January 2016. The rule change is not considered to have any particular financial impact on the Group companies.

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