Interview with Mikkel Hemmingsen, CEO, Sund & Bælt

28 Nov Interview with Mikkel Hemmingsen, CEO, Sund & Bælt

Sund & Bælt is a pivotal player in Denmark’s transport construction, overseeing significant national and international projects aimed at enhancing connectivity and ensuring the security of supply chains for several decades. Could you provide a brief insight into Sund & Bælt’s role in shaping the transportation landscape, both locally and globally?

Our business has two focuses. The first is infrastructure. Some infrastructure projects are too big to be financed purely through tax revenue, although at the same time, the government does not want to give full control to the private sector.

Instead, they have created a hybrid model through which government-owned private companies build connective infrastructure, not just in Denmark but also between Denmark and Sweden, and soon Germany as well.

Our other area of work is providing toll collection services and developing a road-pricing system for the government, in which trucks og 12 tons and above will have a transponder in their vehicle and will pay tolls based on their carbon footprint, not just on highways, but on all roads. It will come online in January 2025.

Sund & Bælt oversees significant national and international projects that are especially crucial when considering that Jutland and numerous islands are connected by at least a dozen kilometer-long bridges. Given this extensive portfolio, could you elaborate on the company’s strategic approach to long-term and holistic infrastructure development? How does the company analyze future transport links and manage the full lifecycle of facilities to ensure sustainable socio-economic growth?

Denmark consists largely of islands, so effective transport infrastructure is going to be expensive, unless you rely on ferries. Our philosophy is that everything we build should last for at least 120 years, which focuses our strategy on what we call life cycle management. This means building and maintaining solid projects that will stand the test of time.

To complement this, we are also digitizing our maintenance process to make upkeep as efficient as possible. We have connected Denmark to Sweden with a bridge, and we are in the process of connecting Copenhagen to Hamburg with a tunnel. Important upcoming projects will address congestion in Copenhagen by building an underwater tunnel right around the capital, and the construction of a second connection between Copenhagen and Jutland on the mainland.

Of course, we have to be able to finance these projects, and we cannot build anything that will not be financed by end users. As such, we are looking into reusing the knowledge and production facilities that we already have. Something that sets the construction industry apart from others is that every project is a one-off; you start over and repeat the whole process every time.

As a result, we are trying to reduce risk and costs by focusing on the construction of tunnels and gaining enough competency and experience that we become the go-to provider of such services. We are trying to industrialize infrastructure development.

The Storebælt Link has not only connected east and west Denmark but also showcased the company’s expertise in bridge and tunnel construction and operation, with 200 contractors from private firms handling operation and maintenance tasks. Can you delve into some other key projects and achievements, highlighting the impact they have had on a national and international scale? How have they contributed to Sund & Bælt’s reputation?

We are currently working on the largest project in Northern Europe, which is a 19-kilometer submerged tunnel between Copenhagen and Germany, which will come online in 2029 and will reduce the road distance between Copenhagen and Hamburg by over 150 kilometers.

In providing this service, we are trying to foster competitiveness and transformation in both cities by integrating their networks and allowing them to develop new competencies and capacities to manage, for example, heavy goods from Sweden and Norway destined for the continent.

Sund & Bælt’s unique business model prioritizes profitability with a strong commitment to social, environmental, and economic sustainability by contributing to the green transition through a comprehensive sustainability strategy, including climate responsibility. How does the company integrate this model with its sustainability strategy, ensuring success in fostering sustainable mobility and infrastructure development? 

The projects are made financially sustainable by the fact that we are working with the government, which means that all Danish citizens are guaranteeing our loans, although only the people using the infrastructure pay for it. That secures us cheaper loans that are guaranteed by society, and we can effectively use the credit worthiness of the Danish government.

Another way in which we are guaranteeing sustainability is to avoid having to build large pieces of infrastructure more than once. By aiming at a lifespan of between 120 and 200 years, we are ensuring that we do not have to sustain the environmental cost of building these large pieces of infrastructure twice.

And our third approach to sustainability involves a payment model through which we subsidize rail infrastructure, which is cheaper to provide than that for lorries and cars, and aids the transition to more sustainable transport for both goods and passengers.

Sund & Bælt’s success is amplified by its international engagements, sharing expertise and collaborations with other parts of the world. Can you provide insights into the company’s approach to engaging with global partners, utilizing IT systems, and leveraging organizational capabilities for construction, operation, and maintenance on an international scale? Are there plans for future collaborations in the US?

We believe that the best way we can collaborate with international companies is by sharing knowledge. For example, we have entered a partnership with IBM to build a digital asset management system, through which we can share our data models and expertise. We have also entered into a collaboration to build a drone that can scan infrastructure to detect cracks in the concrete, which has allowed us to extend the projected lifespan of the Storebælt Link  [the near 18 kilometer bridge between the Danish islands of Zealand and Funen] from 120 to 200 years.

The AI imaging that is behind this process can be shared with other companies in other countries. So, while we are busy building infrastructure in Denmark, we are also building our resources and making them available to our international peers.

Having led Sund & Bælt for more than years and guided it through numerous large-scale projects, including now overseeing the upcoming expansion of facilities such as the Copenhagen Airport Station, what is your vision for the company’s trajectory in the next five years? How does Sund & Bælt plan to adapt to emerging trends during this period?

Studies have shown that only 0.5% of large infrastructure projects like those we specialize in are finalized on time and within budget. So, our objective is the industrialization of the infrastructure sector by, instead of creating everything from scratch, re-using production facilities and know-how to complete large projects on time, to standard, and within budget.

That is what we are working very hard on and to make sure these resources are used more efficiently than in the past, while also bringing our carbon footprint down by 70% without compromising quality.

What is your final message to readers of USA Today?

According to my understanding of the US’s infrastructural challenges, this sort of financing model could help fix and industrialize American infrastructure. The US has been successful at industrializing other parts of its economy, but not infrastructure, which is why you have very nice cars driving on very bad roads.