Phasing of the construction of the Crown Bridges tramway and increased project cost to be decided

Den framtida Kronbergsbron (WSP, Knight Architects)
Den framtida Kronbergsbron (WSP, Knight Architects)

The implementation plan and updated cost estimate for the tramway of the Crown Bridges project have been completed. The new implementation plan sets out the construction of the tramway in phases. As the cost estimate for the tramway exceeds the maximum price set by the city council in its 2016 decision, funding will require new approval by the council.  The Crown Bridges project proposes that the construction of the tramway and the bridges be carried out in phases and the maximum cost be increased by EUR 59 million to EUR 326 million in the first phase.

The phasing of construction and the increase in the maximum cost will first be discussed by the Board of Governors of Helsinki City Transport (HKL) on June 23, and the Urban Environment Division shortly thereafter.

The Crown Bridges project proposes that the tramway be built in two phases and that the last leg of the route not be completed at the Laajasalo end for the time being.

This is what is proposed:

  • In phase 1, a tramway connection will be built from Laajasalontie in Laajasalo to Hakaniemi. The new total cost estimate for this phase is EUR 326 million at the current (December 2020) price level.

The work to be carried out during phase 1 include the construction of a tramway between Laajasalo and Hakaniemi and the construction of three bridges (Merihaka Bridge, Finke Bridge and Kruunuvuori Bridge).

  • The planning and preparation of phase 2, i.e. the implementation of a tramway between Hakaniemi and Helsinki Central Railway Station, continues. The cost estimate for phase 2 will be submitted for approval at a later stage. The current rough estimate of the cost is EUR 10 million.
  • In Laajasalo, the last leg of the tramway line via Ollinraitio and Ilomäentie to Reposalmentie will not be built for the time being. Should this section, which is approximately one kilometre in length, be implemented later, a separate decision will be made concerning its cost estimate and construction schedule.

New cost estimate

When the Helsinki City Council made a decision on the maximum cost of the Crown Bridges project in 2016, the preliminary cost estimate stood at EUR 260 million. At the current price level, the amount corresponds to approximately EUR 267 million. Most of that amount – about 255 million in today’s money – was allocated to the implementation of the above-mentioned phase 1, i.e. the Laajasalo–Hakaniemi section.

A new implementation plan has been drawn up and the cost estimate adjusted in 2021. As a result, the new total cost estimate for phase 1 (Laajasalo–Hakaniemi) is EUR 326 million. The cost overrun is related to the construction of the tramway and Merihaka Bridge.

The bridge contract for the construction of the Kruunuvuori Bridge and Finke Bridge was put out to tender as an all-in contract. The contract value is EUR 123 million, which is in line with the project plan approved in 2016. 

The revision of the cost estimate is due to changes and updates made during the implementation planning. The previous cost estimate for the Crown Bridges tramway was prepared in 2015. At that time, the insights gleaned from the Jokeri Light Rail and Tampere Tramway projects on the implementation and cost level of large modern tramway projects were not yet available. Costs related to the quality level and the extent of the project have also been increased by the updated and stricter requirements for tramway construction.

Other costs to be decided later

Matters to be decided separately include the tramway fleet and the depot, which are Helsinki City Transport projects. The City Council approved the fleet project plan on June 17, 2020. The project plan provides for the acquisition of 23 carriages for approximately EUR 98 million. A decision on the depot’s project plan and cost has not yet been made. Its cost is estimated at EUR 96 million. The costs of equipment purchases and the depot total EUR 194 million; in 2016 they were estimated at EUR 115 million.

In addition to the tramway, the Crown Bridges Alliance is also planning to build other projects related to the city’s development. These include, for example, the construction of a new Hakaniemi Bridge to replace the old dilapidated bridge and the construction of new streets in Hakaniemi.

Since the start of the planning of the Crown Bridges project, the scope of these projects has increased significantly, which has also led to an increase in costs. From an estimated EUR 50 million in 2015, costs have risen to approximately EUR 236 million. The financing of these related projects will be decided separately by the City of Helsinki as part of the budget process. The projects are not included in the cost estimate for the tramway and in the proposed increase in the maximum price.

The scope and cost of the related projects have increased mainly because the tramway was originally designed for the existing street network. Since then, a plan has been completed for Hakaniemenranta, the implementation of which means the construction of completely new streets, plots for residential construction and parks in the area.

The project is split into two parts

The Crown Bridges project is carried out as a combination of two contracting models: The two bridges between Kalasatama and Kruunuvuorenranta (Finke Bridge and Kruunuvuori Bridge) as well as the construction in the land areas in Korkeasaari will be realised as an all-in contract. The contract was won in May 2021 by the Crown Bridges Consortium formed by Kreate and YIT Finland Ltd. According to the tender, the total price of the contract is approximately EUR 123 million.

Other construction related to the tramway between Laajasalo and Hakaniemi, including the third new bridge on the route, the Merihaka Bridge, will be carried out based on the alliance model.

The Crown Bridges Alliance is now in the development stage. During the development stage, tramway plans that are more detailed than the 2016 project plan have been prepared and completed and the construction schedule and costs have been defined. One objective of the development stage is to determine the so-called target cost for the alliance. Target cost means the total cost of the alliance project, to which all parties of the alliance commit themselves when implementing the project.

Maintaining the target cost is part of the alliance’s incentive scheme, which encourages the parties to carry out accurate and well-grounded cost accounting: if the actual cost remains below the target cost, the service providers will receive a bonus, and if it exceeds the target costs, the service providers will pay part of the overrun. In this way, not all risk remains with the client, i.e. the City of Helsinki. The potential benefit, too, is shared with the client, which reduces the client’s costs.

The aim is to start building the tramway line next autumn.