THE "BUY-DANISH-CLAUSE"

Having applied the procedure of prequalification and hereby demonstrated an almost unbounded openness towards foreign contractors A/S Storebæltsforbindelsen obviously felt confident in relation to EEC rules. This tranquillity turned out to be transitory! In autumn 1988 the five prequalified West Bridge consortia submitted their tenders for the three alternative solutions contained in Storebælt's tender documents. Negotiations about app. 40 alternatives and variations, proposed by the consortia, in early 1989 resulted in nomination of a favourite, The Western Bridge Joint Venture which had Bouygues (F) and Trafalgar House Construction (UK) as main foreign partners together with a minor, later bankrupt Danish contractor, Jespersen & Søn A/S. They had proposed a composite steel and concrete solution at a price of DKK 2.97 bn. However, 2 month later the favourite was rejected with the following argument: The contractor is presupposing the employment of 3-5 Danish and one or more foreign steel firms and subcontractors. This is worrying from a technical-quality perspective... The risk of delay due to the many actors is found to be critical. Therefore number two in the tender, European Storebælt Group, offering a plain concrete solution at DKK 3.15 bill. was awarded the contract. To this consortium was subsequently added the largest Danish contractor, Højgaard & Schultz A/S as well as the medium-sized C.G. Jensen A/S, owned by Skanska of Sweden. Both were members of another losing consortium. The underlying motives for this sudden shift in Storebælt's attitude are unclear, but it certainly caused exasperation within the Western Bridge Joint Venture. Headed by Bouygues, it then initiated an energetic campaign against the client's decision - a step which can be characterised as most unusual - at least in the cultural context of contracting in construction! Bouygues argued referring to EEC rules that Storebælt A/S intended to give preference to domestic industrial interests. Even the tender documents were prescribing that tenderers as far as possible should employ Danish materials and consumables, equipment and labour force. However, during tendering period nobody protested against this so-called "buy-Danish clause"! Bouygues' complaint was obviously accepted by the EEC-commission, which then requested the Danish Minister of Foreign Affairs to put off the signing of contracts until legal matters had been investigated. After intense political discussions the Danish government decided to ignore the request and to contract as above mentioned - however, now without the clause! Otherwise, according to Danish contracting rules, the submitted tenders would be repealed and the future of the entire project again become insecure. As could be expected the government's decision aggravated the crisis in relation to the Commission, and in July 1989, legal action was taken against Denmark, stating that Denmark had disregarded the obligations resting on her according to Community law and would therefore be brought before the European Court. The crucial issues were almost identical with the content of Bouygues' complaint, and the Commission requested the Court, as a provisional measure, to request Denmark to suspend the construction works under the contract between A/S Storebæltsforbindelsen and the European Storebælt Group until the Court's could pronounce judgement in the main case. "This can be expected in around two years"! The Commission furthermore requested a new invitation to tender. During the following high-level political and legal negotiations the Commission yielded - construction could commence - and Denmark agreed to compensate those tenderers which were able to document losses due to the "buy Danish clause". Such compensation totalled approximately. DKK 20 ml. In June 1993, the European Court finally ruled that A/S Storebæltsforbindelsen and Denmark had violated both the Treaty of Rome and the EEC tender regulations in connection with the construction of the West bridge: Denmark could not invoke the provisions of the Danish tender rules against procedures laid down by the EEC. The ruling was not followed by sanctions.