M-r Tonning, you’ve had a series of meetings with representatives of the senior management of the Bulgarian Construction Chamber and the Norwegian construction organizations. How would you assess the talks and the agreements reached?
It was very pleasant to have the opportunity to meet and understand that we share a lot of similarities, more than expected actually. Even if we haven’t cooperated or discussed before I can see that we are organizing ourselves pretty much in the same manner, e.g. with the newspaper and how we communicate with our members. In addition to that we can probably add some values to both organizations due to the common understanding that we are representing the same branch. Still we are working under slightly different circumstances and frameworks, when it comes to contract conditions, authorities and finance, which is quite different in Norway, compared to the situation in Bulgaria.
Tell us more about the Norwegian Contractors Association (EBA). What is its structure? Who are its members? How is it positioned against the other business- and sectoral organizations?
This is a wide question, I will try to give the essence of the presentation of Kari Sandberg, the CEO of EBA. We are representing both small and large construction companies and it is important to emphasize that we have very good cooperation not only within the federation but also outside. The smaller companies are working as subcontractors for the larger and I think the larger companies understand the need of working in a good manner with the smaller companies to avoid the social dumping, to increase the reliability of the industry, to be regarded as a serious industry, to be able to attract young people. I think, in some way large companies are helping the small companies. As you understood, EBA is part of another umbrella organization – Federation of Norwegian Construction Industries (BNL), including plumbers, carpenters and so on. BNL is part of a bigger family – the Confederation of Norwegian Enterprises (NHO). We are even located in the same house in Oslo, so we work closely with them in rather good cooperation.
We have conducted a meeting with the Norwegian Road Association. This is a very interesting organization, because they unite the public authorities and the private companies. Tell us more about this model.
It is not a commercial entity. It is an arena for finding and sharing good solutions together. One of the benefits of having such a meeting place is the 10 Subcommittees. The main intention is to find good solutions and share ideas in the Nordic countries. As a consequence of that, people learn to know each other, to have more respect for each other, to give room for less conflicts and make it easier to find and communicate with the right people when it comes to finding good solutions which company or which person you are going to approach and this can lead you to the best answer much quicker. During our visit we saw that you build a lot in Norway. Which are the largest infrastructure projects currently under construction in your country?
There are several road projects being build today in several parts in Norway. А couple of them are implemented by Veidekke, our company, but there are other projects, implemented by other contractors. We have a national transport plan, which is quite interesting, as it is based on understanding between the different political parties. The plan presents which road projects are going to be built in the future and in what sequence, so it is a kind of predicable what is going to happen next years.
This is very interesting. Do you make a political consensus regarding this?
Yes, quite good actually. They are disagreeing about certain aspects, however, there is a large consensus on how to do it, how much should be done until 2020, and how much until 2030.
Does this plan include all types of transport infrastructure, including rail transport, tunnels, etc. Does the plan provide information about the funding schemes of these projects?
Yes, the plan includes all types of transport infrastructure. In terms of funding, some of the large projects are PPPs. A lot of road projects are financed by toll roads. Initially they are funded by the government – the public authorities are using their budgets on projects. The toll roads are used to get the money back to the state. As you might have notices, all cars are equipped with chips and all the time when they pass a toll road the toll taxes are deducted from the respective accounts.
We are fighting for three years to implement such a toll system in Bulgaria. Now when the public procurement appeals are finalized we will hopefully start making the first steps. Tell us more about the functioning of this system in Norway?
I know it more or less as a user as we are not involved in the toll roads from a construction point of view. As a user I know that the toll taxes are increasing all the time. The system is automatically registering where you are driving. They have introduced a time limit from 6 to 9 o’clock, during the rush hour, when it is more expensive on the way to the city center. The closer you are going to the center the more expensive it is. So we are passing through different toll gates every day. For instance, I am passing through 2 different gates on my way to the office, but it could be more than that. So you are paying every time for exactly what you are using and this is one of the reasons behind the toll system. The second one is to reduce the traffic in the city center. But this is somehow in conflict with the commercial interests, e.g. the shops and the restaurants in the city center. So, instead of paying to go to the city center and park their cars in an expensive parking area, it is easier for the people to go outside to the big shopping malls. In this way the shop owners in the city center are suffering from such initiatives.
Do you get enough money from toll taxes which could be reinvested afterwards in the road network?
I think it is definitely a back load in terms of maintenance as well. But it is intentionally to bring back what you collect from toll taxes, not only to reinvest these funds but to use them for maintenance of the existing road system and the bridges. If you look into the newspapers last weeks, there has been a lot of discussions about this, because roads and bridges have not been maintained so well last years. People are afraid that when you pay the toll road they would not be necessary used for roads, may be they will disappear in schools or retirement scheme. Тhat is a little bit dodgy, people need to be convinced to be loyal to the system that it will go back to them and the quality of the roads will be increased.
You are working for one of the largest Norwegian construction companies. Tell us more about this organization. We had the opportunity to review one of its interesting projects, tell us something about it too, even though we will have a separate article about it.
Veidekke is the largest Norwegian company with 8 000 employees and turnover exceeding
EUR 3 bln. It started in Norway, never had a year with „red“ figures, and never had a year with a loss. It is on the stock market, I am not sure about the actual figures, but around 2 000 employees are possessing 50% of the shares. The turnover in Sweden is about EUR 1 bln., in Denmark – EUR 300 mln. and the rest is in Norway. The company is involved in more or less everything inside the construction industry, as you saw the opera, the museum, residential buildings developed by ourselves, roads, producing stone gravel, tarmacking, etc. We are highly specialized in concrete and concrete technology. We are experienced to work in harsh conditions as in Norway, where it is cold. The Munch Museum in particularly will be finalized before Christmas next year and will be tested within 6 months before it opens for the public. It is a spectacular building that has a connection with the opera also built by Veidekke. This is an area that is very difficult in terms of construction works because the ground conditions are quite difficult. Not only because one could find old boats or shipyards for which you have to take good care and investigate before the piling works. As the project manager mentioned, first we needed to build 50 meter down before they started building 60 meters above the sea level again. So this is very complicated work done under the ground level which is never seen and we are 4.5 meters close to the tunnel under the harbor.
You are the President-elect of the European Construction Federation (FIEC) and you are about to head the largest builders’ organization in 2018. How would you assess the current state of the organization? What are the key challenges which FIEC is currently facing? Which will be the key priorities on your new position?
It is a bit too early for me to give this kind of statements because this will be done when I am going into the position in April next year. My general view, I would like to compare what we are doing in FIEC with the EU, because I consider FIEC as its smaller version comprising federations representing different countries inside the EU, trying to find mutual agreements and mutual standpoints which we can align and can agree on. It is the same idea we have to work on within the EU – we are trying to find what we have in common. It is obvious that we have more in common within the industry than what we have with other industries – we are really different from the car industry. We are lobbying and we are trying to convince the Commission to go in one direction. It will be easier for the construction industry to agree and find a common ground for another direction which is more suitable for the construction industry. So it is very good for us to focus and concentrate on what we have in common. It is obvious that we have different challenges in different countries. On some issues we will have different ideas and different opinions. Some countries are posting people, and others are receiving people. Obviously there can be differences in these kinds of topics. However, we have to concentrate on what we can agree upon and to present our standpoints in front of the Commission. I think our industry is around 10% of the GDP, and we can try to enlarge and widen, we can cooperate – we had success when we cooperated with other federations, which are representing different branches. And if we are representing more than 10% of the GDP in Europe, we are extremely strong. This is what I think we need to increase in the future. That is one important thing – to find what we have in common. And the second most important topic is BIM. I have been working within this group, which we have renamed “Construction 4.0” which is the construction industry answer to the Industry 4.0. We can see that things are developing really fast, so we cannot just sit there and wait because everything will change in the next three years and we have to act very quickly, unless other federations and organizations will be in charge and own the discussion. So this is a change actually in the past few years and things are developing much faster and this is a little bit against the nature of what is happening in Brussels – things there have been traditionally a little bit slower. We have the same experience when working with CEN – it takes a long time to finally find an agreement. Sometimes you need a higher speed.
A new FIEC group of the central and eastern European countries was recently created, which was boosted by the Bulgarian Construction Chamber. What are your expectations regarding the initiatives within this group which is very likely to be more active during your presidency?
I hope that you will be the driving force for the Central and Eastern European countries as Bulgaria is the only statutory member within this group. I hope you will have a good voice from these countries within the Steering Committee and to have a closer cooperation to develop a better common understanding on both sides for the situation we have in the Central and Eastern part of Europe.
During our visit in Norway, we had a meeting with the magazine of the Norwegian Contractors Association (EBA) that turned out to have many similarities with the Bulgarian newspaper “Stroitel”. What do you think about the opportunity to increase the information about the activities of FIEC through our newspaper as well as to organize joint Forums and initiative with our Norwegian counterpart?
These are actually two different topics. First of all we could use the newsletter of FIEC, because it is issued every week and is providing fresh news and it is easy for your newspaper to review it and see the latest information. It is a challenge I can see in Norway as well to engage people with what is going on in Europe and what kind of legislation will influence our daily work. Sometimes it is so far for the mindsets of the people running construction businesses that what is happening today in Brussels might influence what we are going to do in two, three or four years from today. If we are not aware of what is happening we won’t be able to take actions to inform the Commission that certain decisions might create difficulties in the future. Therefore, it is very important to be proactive and to realize that our approval or rejection of a certain decision today might turn into a limitation or a legislation with an influence in the future. Whereas, initiatives between our editions – this must be a decision of the chief editors. But I will be very pleased if you find ways to work together.
Do you think that there are opportunities for implementation of joint projects between bulgarian and norwegian companies? How could the Norwegian companies contribute to the successful development of joint projects? What would you expect from the Bulgarian companies?
I think Norwegian companies working together with companies from other countries depends on whether the other companies are able to give added value. Not exactly doing what we are doing – this will not have a value added but will increase the workforce for instance. Having a value added is the only way to be attractive for the Nordic construction industry.
Can you suggest some attractive projects? Would you be interested in a larger infrastructure project in Bulgaria?
There are a lot of interesting infrastructure projects in Norway, but they tend to be very large actually. As for projects in Bulgaria, I doubt we will have interest. The Nordic companies used to work overseas before, for instance in Africa following the aids, but we straggle with the settlement of the agreements, with the financial part of it. Sometimes, we have experienced difficulties with the client in Africa. Even if it is difficult in Norway, it might be more difficult in Africa. Then again, having Norwegians to travel outside entails high level of activities in Norway. I think that engineers and other employees have more preferences to work in Norway.
What is your projection, what would 2018 be for the construction sector on a European level?
It seems like things are getting better and better. We are more or less over the crises, there are difficulties in some countries of course. In Central and Eastern Europe you have different cohesion plans, but other countries have survived. We had a kind of difficulty with the oil industry in Norway linked with the reduction of the oil prices in Norway, but we are slowly going back to the game again. Overall it is quite good. What is interesting to see is what the consequences of Brexit are in terms of workforce and the people from the UK working in Europe. We haven’t seen that yet.
On the eve of the Christmas holidays, you have to opportunity to wish something through our newspaper to your FIEC colleagues, the Bulgarian builders and the readers of newspaper “Stroitel”.
Of course I would like to wish the entire industry all the best and I hope there will be a lot of work in all countries and less conflicts between the construction companies and the clients.