In Norway, about 40 subsea tunnels in rock have been constructed over the last 25 years with the use of unit price or unit rate type of contracts, with only one exception. The standard unit price contract used in Norway is based on risk sharing between the owner and the contractor. The owner retains the risk for the geological conditions while the contractor has the risk for efficiency of performance. The typical risks for subsea tunnelling are related to:
Case histories
All of the project case histories were excavated as single tube tunnels by drill and blast (Table 1). Expected rock cover satisfied the requirements of the Norwegian Public Road Administration(1), which allows rock cover of less than 40m if favourable conditions are documented by detailed site investigation. ‘Favourable’ conditions must in this context be read as including fault zones, but still allowing open face excavation(2).
Table 2 presents the site investigations conducted prior to tunnelling. The approach followed established Norwegian practice(1,3). This includes on-land geological surveying, reflection seismics to find a suitable corridor for the tunnel, refraction seismics to determine rock cover and indicate rock mass conditions, and directional core drilling to check critical areas. All tunnels were constructed emphasising systematic probe drilling, and pre-grouting as needed, ahead of the face. This included typically 3-5 percussive probe holes of 30m length, with minimum 8m overlap and full pre-grouting fans of 15m-25m length (Table 3).
Godøy tunnel
The Godøy tunnel on the west coast of Norway was financed by private loans to be repaid by toll revenues. The geological conditions were well known, including experience from the nearby Ålesund tunnels. Normal site investigations, but no core drilling, were performed. The contract was a standard unit price contract.
The rock mass quality proved to be better than expected with respect to stability (Table 3). However, a joint set with open character, striking NE-SW along the coast, required far more pre-grouting than expected. This was possibly due to relatively recent tectonic movements, resulting in joint apertures as wide as 25mm-30mm. The actual grouting quantity was 3.2 times the tendered quantity, with respect to dry weight, and took six times longer to produce. The phenomenon of open joints was foreseeable, but the extensive grouting effort required was not expected.
Despite the increased pre-grouting, the tunnel was open for traffic after 16 months’ construction, five months ahead of schedule. This was mainly due to the reduced time for rock support. According to contract regulations, construction time was adjusted allowing for the increased grouting time. The grouting efforts increased the tunnel cost by approximately 5%.
It is debatable whether it would have been possible to determine the unexpected open character of the joints by directional core drilling prior to construction. The cost of one to two such holes could have reached 2-4% of the tunnel cost, or more.
Even if the open character of the joint set had been realised, this may only have changed the estimated quantity for grouting in the Bill of Quantities (BoQ). Somewhat lower unit prices may have been tendered, but would not have offset the increased investigation costs. In this respect, the extent of site investigations was cost effective. All activities were covered by quantities and corresponding unit prices and ‘standard capacities’. No conflict or litigation resulted. Therefore, the contract worked according to intentions, ie the client kept the basic risk for ground conditions.
Bjorøy tunnel
The Bjorøy tunnel is located on the west coast of Norway, outside Bergen, establishing a fixed link between an archipelago of islands and the mainland. The plans were promoted by private initiative. There was no public financing available, except by toll fees and the normal contribution from capitalised ferry subsidies. This triggered the interest of one of the large contractors, and a fixed price project was proposed.
The local Public Roads Administration prepared the detailed design and managed the contract. Nothing unusual was expected regarding geological conditions, except relatively large quantities of conventional rock support measures. The Pre-Cambrian gneisses and the metamorphic rocks of the Caledonian mountain range formation were known from other projects in the district.
The contract contained very specific clauses regarding risk allocation. The contract sum constituted the full reimbursement to the contractor, for excavation, rock support, grouting, other civil works and installations, including any variation in quantities or change of conditions. The contractor had full responsibility for any further site investigations, and all risks in connection to the ground conditions were his.
During excavation, it was found that the rock mass was generally more jointed than anticipated and significantly increased pre-grouting became necessary. The main problem, however, occurred as the tunnel reached a fractured zone consisting of Jurassic sediments (sandstone and breccia), see Figure 1. This sub-vertical sheet-shaped zone intersected the tunnel at an angle of 30-35° giving very poor conditions over a 45m section, with a 4m wide zone of loose sand and with 80m water pressure(7,8).
The contractor engaged an ‘expert group’ to advise on a safe tunnelling method. After three months’ preparation, the zone was excavated utilising extensive pre-grouting with micro-fine cement for sealing and compaction, as well as attempts at chemical penetration grouting. The excavation was secured by short rounds and extensive use of pre-bolting (‘spiling’). Technically this method was successful.
The tunnel was completed 10 months behind schedule, about half of which can be directly allocated to the Jurassic zone, the rest to the very poor ground adjacent to it. The contractor claimed additional reimbursement amounting to 60% of the fixed price for the adverse and unexpected ground conditions, which he characterised as ‘extreme’. A settlement was not reached, and the case went to court. The first court level agreed with the contractor on the basis of the exceptional ground conditions. This verdict was appealed. The higher court level agreed with the owner, primarily on the grounds that the contract clearly addressed the risk allocation.
The Jurassic zone, occurring in this area and in this manner, was indeed unforeseen and was characterised by geologists as ‘sensational’. It may be considered as a rare case of ‘unforeseeable’ conditions. The presence of the exceptionally poor ground conditions might have been determined by long directional core holes, at a significant cost. However, due to the overall confidence in the geological conditions, it is unlikely that any party would have wanted to pay for such investigations.
Paradoxically, the exceptional use of a fixed price contract coincided with the occurrence of exceptional ground conditions. Had a normal unit price contract been used, the generally poorer conditions would have been handled routinely by the regulations for increased quantities. The exceptional Jurassic zone would likely have been taken out of contract and reimbursed. The owner would have taken most of the extra cost.
As it was, the contract can be said to have worked according to intentions from the owner’s point of view, but not from the contractor’s, who took a heavy loss. A less solid contractor might have gone bankrupt in the process and left the tunnel uncompleted. The owner would then have had two options: either to complete the tunnel at the expense of delaying other public projects or leave it uncompleted. This demonstrates that the owner is exposed to significant risks, although the fixed price contract was intended to minimise risk.
Oslofjord Tunnel
The Oslofjord tunnel is located 40km south of Oslo. It was financed partly by the government, capitalised ferry subsidies and loans to be repaid by toll revenues. The contract was a standard unit price contract.
The tunnel passes through different kinds of gneisses and under the fjord it crosses three major fault zones striking N-S. The geological conditions were well known in general. Extensive site investigations were performed including directional core drilling through the fault zone along the west side of the fjord at tunnel elevation (Figure 2). This fault zone was the one expected to be worst. During construction, the rock mass conditions encountered was more or less as expected. However, as tunnelling advanced from land out below the sea, percussive probe drilling revealed that the westernmost fault zone was eroded to an unexpected depth. A section of 15m was found not to be passable by open face excavation, as it contained loose soil deposits under 120m water pressure. The tunnelling had started from a steep adit close to shore in order to reach this fault zone at an early stage.
Preparatory grouting, followed by ground freezing of a 30m section, enabled the safe passing of the eroded zone. The parties, supported by external advisers, agreed on the applied techniques(10). The freezing took longer than anticipated at first, but the tunnel was completed on schedule because the zone had been encountered early, and access for continued tunnelling under the fjord was gained through the construction of a bypass tunnel.
The parties acknowledged the particular conditions in the eroded fault zone and its necessary treatment as being outside the scope of the contract. A special agreement was made for the bypassing of the zone. The phenomenon of possible deep erosion was foreseeable, and was the very reason for the targeted investigations. Still the interpretations proved to be inaccurate.
This demonstrates that it is possible to make agreements outside the contract to deal with such unforeseen circumstances. However, after the successful technical completion, litigation still followed. This was due to disagreement about the payment for crossing the zone and the extra costs for the transport through the bypass tunnel. The total cost increase, which remains to be settled, is in the order of 10-20% of the expected tunnel cost.
Lessons learned
These lessons may be valid for most tunnelling works:
Risk sharing Norwegian style
A closer look at the unit price contract may be useful. It addresses two main elements of risk:
A unit price contract is characterised by the following:
The successful application requires:
A main advantage is that the contractor’s incentive to meet the penalty deadline is maintained, even if ground conditions get worse. Despite the advantages and good track record of unit price contracts in Norway, an increasing number of projects end up in litigation. This appears to be due to:
Conclusions
The unit price contract is a useful tool to deal with inevitable variations in quantities for activities relating to stabilisation of the rock mass and ground treatment. Such variations are hardly ‘unexpected’ in most cases. If truly unexpected conditions occur, the unit price contract does not provide a ‘magical’ solution. The success of the project will then depend on the ability and willingness of the parties to solve the technical and contractual problems.
Fixed price contracts may not provide a ‘magical’ solution either, although they have an apparent predictability of cost. If unexpected conditions occur, the owner may end up with the risk anyway.
The authors believe that a suitable balance for risk allocation can be found, allowing a combination of the potential advantages of both unit price and fixed price contracts. It follows that the risk allocation must be specified in the tender documents, describing the geological features or the stabilisation and ground treatment methods that are included (or not) in the contractor’s risk. Not forgetting that the contractor must be able to price the risks allocated to him.
Further, project specific risk allocation may be optimised by including in the contract:
Such measures were successfully applied for the subsea tunnels below Hvalfjördur in Iceland and Vestmannasund in the Faeroe Islands(12), following the general recommendations by the International Tunnelling Association (ITA) about risk sharing(13).
This subject is discussed in greater detail in the paper “Suitability of unit price contracts for dealing with unexpected geological conditions”(14).
Related Files
Fig 1 – Longitudinal section of the Bjorøy tunnel
Fig 2 – Weakness zones at the Oslofjord tunnel (looking north) indicated as expected from refraction seismic profiles
Fig 3 – Risk allocation principles (after Kleivan(11))
