The Norwegian Public Roads Administration is negotiating final details of a $1-billion highway project set to pilot a greenhouse gas strategy that could shape its future procurement. But ambitions to establish the country's strictest-ever construction regime to cut carbon dioxide emissions were reined in when two of three bidders for the highway's public-private partnership deal pulled out.
The administration late last month appointed Hålogalandsvegen AS preferred bidder to finance, design and build the 51-mile E10 highway and operate if for 15 years. Financial close on the deal is expected within weeks.
Owned equally by the Norwegian and Swedish pension funds of Stockholm-based Skanska AB, Hålogalandsvegen will have a consortium led by Skanska Norway to handle turnkey construction.
"We have never analyzed the CO2 emissions in the way we have done on the E10 before," says Ketil Sand, who leads the Skanska bid and will manage the P3 contract. "I wasn’t aware that the land take had that big an impact on the climate emissions."
On his previous P3 project, completed three years ago, "we didn’t have any climate budget," says Sand. "We did not have that level of awareness of the huge [impact] of the marshlands, or what the different materials had."
Located about 110 miles north of the Arctic Circle, the E10/rv.85 Tjeldsund-Gullesfjordbotn-Langvassbukt highway would ease travel between the Lofoten archipelago and Norway's main north-south highway, E6.
Planned construction, lasting 5.5 years, includes 12 miles of new alignment, 22 miles of upgrade and 17 miles in seven new tunnels, up to 6 miles long.
Launching the procurement three years ago, Norway's highway agency set a goal to halve CO2 emissions, in line with the country's strictest ever environmental and climate requirements. Its aim was to "set a precedent for future road construction and construction operations," said Stein Johnny Johansen. agency north region development director.
Planned measures included minimum emission level reduction targets with a contractually binding CO2 "budget," incentivized by financial penalties and bonuses, he said.
But the administration's plans started going awry in February 2022, when the Via Borealis consortium withdrew from bidding. Led by Italian toll road operator builder ASTM S.p.A., it included Spanish contractor Acciona Group, which was working on a troubled highway contract further south.
That was followed, a couple of weeks before last September's bid deadline, by withdrawal of Nordland Connect, led by Polish contractor Gülermak Sp. z o.o.
Authority director of development Kjell Inge Davik described the second departure as "unfortunate." Yet the market remained competitive in "today's economic backdrop," according to an administration statement.
But "having a penalty on a [climate] budget where we were the only supplier didn't make sense," says Skanska’s Sand. So, the penalty was converted into a "climate fund" to develop environmentally beneficial ideas, techniques and machines, he adds. "The bonus was also reduced a lot ... but there is still an incentive for us to reduce emissions."
While the highway agency model considers carbon emissions of materials used in construction, it also "takes into account the land you use and [the transformation] from marshland, farmland [and] forest to road," Sand says. "That has a huge negative impact on the CO2."
"The most effective measure we can do is to optimize the road alignment itself," Sand says. The contractor has freedom to adjust the highway's elevations and alignment, while controlling ground water disturbance in the marshes.
Minimizing the volumes of cut and fill and reducing transportation distances are normal economic considerations in highway work, agrees Sand. But "now we also have climate impact," he adds. "Cost and CO2 go hand in hand."
E6 Highway Project Faces Delays
Around 370 miles south of the new E10 project, the Spanish contractor Acciona Construccíon SA and Norway's state highways designer-builder Nye Veier recently announced a potential two-year delay to the 14-mile E6 Ranheim-Værnes highway, east of Trondheim.
The pandemic, inflation and regulatory snags added to difficult ground conditions to push back the $400-million project's completion date from October 2025.
Neither Acciona nor Nye Veier anticipated the project's difficulty, according to the owner's development director, Espen Almlid.
Using the early contractor involvement model, Nye Veier appointed Acciona in 2018 jointly to develop the project that forms part of one of Norway's most important highways. The project will widen from two to four lanes the existing highway and add three tunnels totaling 4.6 miles.
After some two years of work, the two parties signed a development agreement in May 2020. Design firm Ramboll Group A/S and tunnel contractor Leonhard Nilsen & Sønner AS are Acciona subcontractors.
