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Sunday, May 22, 2022

Bankruptcy halts major projects

The bankruptcy last week of an Austrian construction firm is causing problems for some major road projects in Norway. Work stopped on the expansion of the E6 highway near Minnesund, for example, and on an E6 bridge near the northern city of Alta.

The disruption of projects from the far north to the southern part of Norway came after the Austrian firm Alpine Bau was declared bankrupt in Vienna on Wednesday. The company listed debts of EUR 2.6 billion and assets of around EUR 661 billion, reported newspaper Dagens Næringsliv (DN).

Workers sent home
The bankruptcy has hit around 15,000 employees and 8,000 creditors. In Norway, workers were sent home after work came to a sudden halt on the Kåfjord Bridge outside Alta in northern Norway, part of improvements to the E6 highway through Alta. At the opposite end of the country, around Minnesund, workers were also told to stop working on the new highway and railroad along Norway’s largest lake, Mjøsa.

“The situation is unclear,” Gudmund Løvli, project leader for the E6 bridge in northern Norway, told Norwegian Broadcasting (NRK) late last week. “We have registered that subcontractors have left the worksite after Alpine Bau has gone into bankruptcy.”

On Monday, officials at both the state highway department (Statens Vegvesen) and the state railroad (Jernbaneverket) were demanding an answer from Alpine Bau’s bankruptcy estate as to whether it will take over responsibility for the major public works projects. If not, reported DN, the state agencies will need to quickly find other contractors to do the job and exercise a bank guarantee that Alpine Bau secured last year on the project along Mjøsa.

Only around 60 meters remain to connect the bridge over the Kåfjord, but key personnel needed to pour concrete to finish the project were among those leaving the worksite. Subcontractors were caught in a bind, but wouldn’t continue with no assurance of being paid. The project leader said that in a worst case scenario, a new construction firm will need to be called in to finish the job there also.

‘No one to pay the bills’
The situation is much the same thousands of kilometers to the south in Minnesund. “We have been told that there’s no one to pay the bills,” Edvard Skjervum of subcontractor Feiring Bruk told DN. “We have to find other means of earning money.”

Alpine Bau won the job to build 6.3 kilometers of four-lane highway and 5.2 kilometers of double-tracks for NOK 1.3 billion. The highway was supposed to open next year, and the railroad improvements in 2015. State officials insist they had screened Alpine Bau’s financial situation just as vigorously as they would have with a Norwegian contractor, and say they received a “good” bank guarantee. The Austrian firm, part of Spanish concern FCC, reportedly got into financial trouble after suffering losses on projects in Eastern Europe and the Baltic.

“Now we have to wait to see what the bankruptcy estate will decide,” said project leader Anne Braaten. “We hope to get some clarification as soon as possible.”

Views and News from Norway/Nina Berglund

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