Construction scandal to cost DKK 32 million a year in extra rent. Absurd, says rector

The case of the heavily-delayed and ballooning costs of the Niels Bohr Building could have the University of Copenhagen (UCPH) paying an extra DKK 32 million a year in rent, writes the newspaper Information.

This is even though the Danish Building and Property Agency – the Danish government – is responsible for the construction, and the university is to lease the property as a tenant.

This has had UCPH rector Henrik Wegener on Twitter calling it “absurd” if the university has to pay for the faults of the property agency.

Danish Building and Property Agency taken off the case

The price of the building has increased by DKK 1.3 billion to DKK 2.9 billion and it is not expected to be ready for the summer of 2019, that is, approximately two and a half years later than originally planned due to delays and piping defects.

Yet the property agency, as the owner of the building, wants UCPH to pay around DKK 445m of the cost increases.

The agency was taken off the management of the government’s construction projects in November 2017 after the auditors Ernst & Young released a report. They concluded that “the property agency had not provided the necessary management control of major construction projects that would let it manage larger construction projects satisfactorily in the future.” This applies both to the Niels Bohr-project and to other projects.”

The Danish Road Directorate was put on the completion of the Niels Bohr Building instead.

Sent to arbitration

UCPH set off arbitration proceedings in June against the property agency. Kim Haugbølle, senior researcher in construction management at Aalborg University, says to Information that the core of the arbitration proceedings is that the Ministry for Transport, Building and Housing has calculated that DKK 445m has been used for “work that has added value”.

Anders Boe Hauggaard, Deputy Director of Campus Service at UCPH says to the Danish newspaper however that the University has asked for changes to the construction that amount to DKK 35 million.

“The dividing point is whether the agency’s interpretation of this increase in value is reasonable and applicable in a legal sense,” Kim Haugbølle says to Information.

Will the minister keep his promise?

Minister of Transport, Building and Housing Ole Birk Olesen said on 2nd November 2017, when he removed the property agency as contractor for the Niels Bohr Building, that UCPH would be exempted from paying most of the extra expense.

“Some of the extra expenses are due to the university requesting changes to the building, and the university mus of course pay for this. But this is not the largest part. The largest part of the extra bill comes from having to replace a contractor and carry out new plumbing and electrical work,” the Minister said to the Danish daily Politiken.

According to Information, Ole Birk Olesen now has no further comment, as the disagreement over the contract and rent is now being dealt with in the internal state arbitration case.