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CASE ANALYSIS the Bothnia Line

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CASE ANALYSIS the Bothnia Line CASE ANALYSIS The Bothnia Line Carl Darenlind, Frida Vånder, Carolin Svensson Johnson, Gustaf Hammerbo Introduction The Bothnia Line is a railway connecting Nyland and Umeå traveling along the eastern parts of the coast of Norrland and is the largest infrastructure project in Sweden since the second world war (Pettersson 2010). It is a project built between 1999 and 2010, while the initial finishing year was 2006 (Pettersson 2010). The project was decided by The Swedish Parliament in 1997, although it was first mentioned in 1992 after the initial idea came from The Swedish Transportation Agency Part North in the early 1990’s (RIR 2011:22). There was also a company created to commence and build the project - Botniabanan AB. This company was created in collaboration with the municipalities of Kramfors, Nordmaling, Örnsköldsvik and Umeå (Lundman 2011). The ambition of the railway was to decrease the travelling time between Örnsköldsvik and Umeå, as well as the larger region of Stockholm and Umeå. Another important aspect for building The Bothnia Line was to relocate freight goods to the railway making it easier to transport goods along the coast of Norrland, which is a region heavy in timber, metals, and other material goods. The earlier railway connecting the region had reached its capacity ceiling, therefore there was a need for an increased railway infrastructure. The initial budget of The Bothnia Line was 11 billion, although the final cost of the project was 16 billion excluding interest. In a report from the Swedish National Audit Office (The Swedish NAO) the total cost was increased to 25 billion taking other upgrades on connecting railways into the cost (RIR 2011:22). This cost analysis has been criticized by Botniabanan AB but is an important factor when discussing The Bothnia Line, and why it overreached its budget so heavily (SVT Nyheter Västernorrland 2011). The Bothnia Line consists of 190 kilometers new railroad, 143 bridges, 25 kilometers of tunnels, and would together with the improved Ålandsbanan also decrease the travelling time between Sundsvall and Umeå. One of the major aspects for the cancelled trains (one in five trains between Örnsköldsvik and Umeå was cancelled during the first 6 months) is the ERTMS (European Rail Traffic Management System) which The Swedish Transport Administration (Trafikverket) has demanded that the government will postpone after the experiences from The Bothnia Line (Eriksson 2012). There have been 530 environmental issues concerning The Bothnia Line with 117 of them having been trialed in environmental court, which is one on the reason for the time delay as well as the budget overreach (Pettersson 2010). The total cost of the environmental issues has been 624 million SEK, with three times the amount of that if one includes the delays due to the court processes (Pettersson 2010). 2. Case Analysis In the report from The Swedish NAO they state that the initial intentions with The Bothnia Line was not met due to the need for further investments in other infrastructure projects such as Ådalsbanan to work efficiently (RIR 2011:22). The intended requirement for freight trains on The Bothnia Line would also not be met due to increased investments in Ostkustbanan, as well as problematic conditions surrounding railways connecting to The Bothnia Line. There is also a critique concerning the decision basis from The Swedish Transportation Agency as they have not mentioned the need for increased investments in Ostkustbanan, as well as there have been unrealistic expectations concerning the timetable for the trains running on the railway (RIR 2011:22). Furthermore, The Swedish NAO has given substantial critique concerning the understated travel time between Stockholm and Umeå, as well as between Sundsvall and Umeå. Over thirty minutes in the first example and thirty-five minutes in the latter one. The price point on 26 billion is 140 percent higher than the initial cost. The Swedish NAO states that this is due to increased societal changes and underestimations from The Swedish Transportation Agency. Furthermore, The Swedish NAO has criticized The Swedish Transportation Agency for underestimating the cost for their projects due to the projects being able to get a positive political decision. There was also a pre-investigation conducted by The Swedish Government that did not reach the same decisions as The Swedish Transportation Agency, but this was critiqued for not being unbiased and not being able to govern on its own terms (RIR 2011:22). The first known estimated cost of the project is from 2000 where it was estimated that the project would cost 12 200 MSEK, but in 2005 this was revised to 16 500 MSEK. A further breakdown of the costs highlights that 85 percent of the costs were due to indirect costs such as administration, detailed design, purchase of land as well as preparatory work. The remaining cost increase of 15 percent comes from the direct building of bridges, tunnels, groundwork, and electrical infrastructure etcetera (Lundman 2011). These increased costs also hindered the Swedish Transportation Agency to invest in other projects decreasing their major budget (Lundman 2011). This has further led Lundman (2011) to conclude that most of the cost overruns occur in early stages of a project – namely in the planning stages. The critique of the project is further enhanced by The Swedish Society for Nature Conservation, which in a debate article from 2008 states that the delta of Umeälven has unique natural values in a European perspective which has made the site a protected Natura 2000-area. This is an even higher protection for the nature than if it had been a National Park. The Swedish Transportation Agency did in the planning phase of the project lock themselves in into building the largest railway in Sweden, which according to all the studies would bring serious implications to the flora and fauna. This also was later proven correct due to all the environmental cases against The Bothnia Line (Pettersson 2010). References Lundman, P. (2011) ‘Cost management for underground infrastructure projects: A case study on cost increase and its causes.’ Doctoral thesis, Luleå University of Technology. Eriksson, Johan. (2012) ‘Botniabanan ännu en dyrbar tågförsening. ’ Svenska Dagbladet. 3 August. https://www.svd.se/botniabanan-annu-en-dyrbar-tagforsening/ (Received 2020-10- 10). Pettersson, Thomas. 2010. ‘13 miljarder kronor senare – grönt ljus för försenad Botniabana.’ Expressen. 28 August. https://www.expressen.se/nyheter/inloggad/13-miljarder-kronor- senare---gront-ljus-for-forsenad-botniabana/ (Received 2020-10-11). Riksrevisionen 2011:22. ‘Botniabanan och järnvägen längs Norrlandskusten – hur har det blivit och vad har det kostat?’ RIR 2011:22. Stockholm: Riksrevisionen. Isaksson, Carola. (2011) ‘Botniabanan Avvisar Kritiken’ https://www.svt.se/nyheter/lokalt/vasternorrland/botniabanan-avvisar-kritiken SVT Nyheter Västernorrland. 21 June. (Received 2020-10-11). .
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