Fehmarnbelt Link project, Denmark

June 2008; through an agency for the Chamber of Industry and Commerce in Lübeck. Around 10,000 words in total:

Fehmarnbelt Link

Land ahoy!

Work is due to start on the Fehmarnbelt Link in 2011 and, to ensure its success, this project of the century is also receiving the support of the Chamber of Commerce.

The fixed Fehmarnbelt Link is an infrastructure project of hefty proportions: 19 kilometres long, 281 metres high, and requiring 265000 lorry-loads of gravel and soil. During the eight-year construction phase, up to 7500 workers will be needed every year in order to build Europe’s longest bridge.

The Fehmarnbelt is the break in the direct land link between the greater Copenhagen area/Southern Sweden in the north and the Hamburg/Lübeck region in the south. The shortest route from Copenhagen to continental Europe, which extends for just under 20 kilometres, leads across this strait. Construction costs for the bridge are 5.6 billion euro including the development of the infrastructure connections on the German and Danish side. This is an investment that will pay for itself: for every euro invested, Germany and Denmark will earn 1.94 euro (benefit-cost-ratio 1.94). The reason for this is a considerable fall in travel times within Scandinavia: the fixed connection would reduce the car journey from Hamburg to Copenhagen by 65 minutes to three hours. Travel time by train would be shortened by 105 minutes to three hours (maximum speed 160 kilometres/hour) – even to two hours by high-speed train (200 kilometres/hour).

The bridge across the Great Belt was completed in 1997, the Öresund Bridge between Copenhagen and Malmö in 2000; these were the first two necessary steps by Denmark and Sweden towards Scandinavia’s road traffic link with the European mainland. The Scandinavian countries are frontrunners in practically all criteria of the Lisbon Agenda (the European Union’s plan of action to improve Europe’s competitiveness). The fixed link across the Fehmarnbelt can be the v-belt that connects this engine for growth with the European mainland, offering Northern Germany the opportunity to balance out the north-side divide that prevails in Germany.

Georg Jarzembowski, Hamburg’s MEP, stresses the pan-European dimension of this project: “The creation of a fixed road and rail link across the Fehmarnbelt between Germany and Denmark is a key element in the completion of the principal north-south connection between Central Europe and the Scandinavian countries. This project is intended at the same time to trigger new impulses in the Baltic Sea region, particularly in Germany and Denmark.” An intelligent form of financing has been chosen for the construction of the Fehmarnbelt Bridge: the state backing means that the financing costs will be lowered for the private investor, but in the final analysis no taxpayers’ money will be spent on the bridge. The many and varied positive socio-economic effects of a fixed link across the Fehmarnbelt will thus be generated without squeezing out other infrastructure projects. Experiences from the construction and operation of the Great Belt Bridge and the Öresund Bridge point to many good things for the Fehmarnbelt Link. Traffic frequency has far exceeded investors‘ expectations, meaning that amortisation will be achieved sooner than scheduled. At just under 30 000 vehicles per day in 2007, traffic frequency is almost twice as high as forecast.

The Öresund Bridge saw its 35 millionth passenger after just seven years in 2007, with 24 million of these passengers travelling by train alone. At the same time, passenger figures in the ferry traffic between Helsingör and Helsingborg have remained at about the same level as in 2000. The bridge has therefore led to a general rise in traffic frequency and has not simply replaced the ferry traffic.

The bridge has considerably improved the Öresund region’s accessibility and transport capacities, opening up new prospects for companies and employees in the region. Cross-border networks have come into being, such as for example the coming together of medical technology companies in both regions to form the renowned MediconValley, or the merger of the Copenhagen and Malmö ports. “Since its opening in 2000, the Öresund Bridge has also been the driving force in the successful development of Copenhagen Malmö Port AG. The Bridge attracts many companies to the region, lots of them realign their logistics chains and choose the Öresund region as a distribution hub for the whole of Scandinavia, the Baltic countries and Russia”, says Lars Karlsson, Managing Director of Copenhagen Malmö Port AB.

“Locational Advantage due to Logistics Competence in Wiesbaden and the Rhine-Main Region”

Translated from German into English for the City of Wiesbaden, Logistik RheinMain, and the Wiesbaden Center for Cluster and Competitiveness; publication June 2009.

Page 5-6

Management Summary

The significance of efficient mobility and logistics as a pre-requirement for growth and as an employment engine within the Rhine-Main region was long overlooked – even though Frankfurt Airport, the region’s strong industrial and commercial basis, as well as innovative service providers and a multitude of education and research institutions have already delivered all the pre-requirements for an innovative, internationally competitive cluster. At the same time, both nationally and internationally, the region is proven to be among the top locations for logistics and logistics competence.

The survey “Knowledge in Wiesbaden – Locational Advantage due to Logistic Competence” was compiled on assignment from the Business Development Office of Wiesbaden by the Supply Chain Management Institute (SMI) within the European Business School (EBS). It elucidates Wiesbaden’s role in the development of the Rhine-Main region as a location for logistics and logistics competence, as well as the significance of the promotion of cluster development.

In Wiesbaden as a business location, the service provider sector has a presence which is more pronounced than on average. Numerous knowledge-intensive service providers specialise in logistics and supply chain management. This makes Wiesbaden a significant component of the Rhine-Main logistics cluster. The federal state capital and the SMI within the EBS jointly recognised the potential of the logistics sector at an early stage. Not least in order to promote networking between the providers of logistics-relevant services, the two partners initiated “Logistik RheinMain. The Knowledge Initiative” in March 2007.

The basic conditions for this initiative were outstanding; after all, the roots of the logistics cluster within the region extend right back into the Middle Ages. Thus, with Wiesbaden as its base, Logistik RheinMain has developed rapidly to become a supra-state cluster initiative for the entire Rhine-Main region and has already achieved major milestones during the first two years of its existence, such as, for example, the approval of nine theses concerning the future of logistics in the Rhine-Main area and the raising of awareness of the logistics cluster as a result of attendance at numerous trade shows and events.

The initiators trod new paths during the organisation of the initiative: federal state capital Wiesbaden combined the construction of the Logistik RheinMain initiative with an innovative employment market project. At the same time, the initiative’s scientific management ensures that up-to-date scientific findings from cluster research are integrated with, and contribute to, the activities.

The latest scientific surveys compiled in partnership with the Harvard Business School provide evidence, in an impressive manner, of the positive effect that the number of enterprises within networked clusters has on innovative force, productivity, the settlement of enterprises and the prosperity of the region: intensive competition and settlement (precisely by competitors too) have a positive effect on the competitiveness of enterprises and scientific institutions on the global market – as long as they make use of common features where these features mean advantages for all participants, especially for the region as well.

Logistik RheinMain intends to open up these advantages even more effectively for the players within the logistics cluster. Realisation of this objective is to be accelerated by means of a unique forward-looking project: the House of Logistics and Mobility (HOLM) being planned at the Rhine-Main region’s point of crystallisation, Frankfurt Airport. The HOLM sees itself as an inter-university competence and co-operation platform, closely interlinked with practice, which is to take account of the advancing complexity and interdependence of practical problems. The task is therefore to multiply the potential of all participating partners: in this context, joint research on topics of the future is to be performed and expanded at the highest international level; partner training is to be combined with joint further education of the highest standard. Logistics and mobility are going to become a tangible, vivid experience for the general public.

At the same time, the HOLM is to become a location for research into cluster issues. In order to systematically investigate and expand the existing strengths of the federal state capital and of the Rhine-Main region within the field of industry and service provider clusters, Wiesbaden, together with the SMI within the EBS, is planning the construction of a “Wiesbaden Center for Cluster and Competitiveness”. As Germany’s only site within the network of Competitive Institutes, this center is going to drive forward the focal points: logistic clusters, logistics within industry and service provider clusters, as well as global networking of logistics-related cluster activities, and thereby work on an existing gap in research and on a forward-looking research field.

With the initiation of the Logistik RheinMain cluster initiative, the active participation in the construction of the House of Logistics and Mobility and the establishment of a Center for Cluster and Competitiveness, the federal state capital is providing clear stimuli for the continued development and positioning of Wiesbaden and of the Rhine-Main region as a whole.

Page 7

1. Background and Objectives

Germany faces global competition as a place to do business: excellent logistics are therefore an economic and location factor in their own right. Germany is known for its well trained and competent logistics experts – and companies benefit from this. Be it in the automobile or electrical industry, engineering or retail: even in international companies, supply chain managers often come from Germany. Five major success factors that contribute to the performance of logistics systems are education, research, infrastructure, process know-how and companies’ networking capability.

Awareness of the great importance of logistics, of the competencies required for this and of the associated success factors has grown in recent years – also in the Rhine-Main region, which is recognised internationally as a top logistics location. Wiesbaden has played a significant role in this context, not only in the past when the West Berlin air lift was coordinated from Wiesbaden. Wiesbaden assumes important functions in the present day as well, especially as a location for knowledge-intensive and logistics-related services as well as as a result of promoting the cluster initiative, “Logistik RheinMain. The Knowledge Initiative.” Wiesbaden is simultaneously on course for the future: the federal state capital is an active participant in the creation of the House of Logistics & Mobility and is planning the creation of a Wiesbaden Center for Clusters & Competitiveness.

This study sheds light on the development of federal capital Wiesbaden as an activator for promoting logistics and logistics competence within the city itself as well as throughout the Rhine-Main region. Its basis is a portrayal of Wiesbaden’s profile as a business and university location, with a particular focus on logistics and logistics competence. The creation and development so far of “Logistik RheinMain. The Knowledge Initiative” will then be illustrated. In addition to development milestones and glimpses into scientific support for the initiative, clarification will be provided on the progress of the employment advancement measure, in the course of which Wiesbaden financed six positions for the creation of the branch office. Finally, potentials and perspectives for future development will be presented, particularly with regard to the House of Logistics & Mobility and the planned Center for Clusters & Competitiveness.

Page 8

Logistics Understanding

According to the definition by the Supply Chain Management Institute (SMI), logistics encompasses the holistic coordination of all flows of information and goods as well as the execution of associated activities and processes in companies and supply chains. Supply chain management (SCM) – as an internationally usable term for holistic, cross-company logistics management – is hence, in times of globalisation and in many sectors, no longer a vision but a necessity. For service providers, know-how and information are decisive production factors today. Fundamental tasks, such as know-how management and information systems, would therefore need to be analysed just as comprehensively from the logistical point of view as document logistics (for example).

The majority of companies in Wiesbaden demonstrated a modern and holistic understanding of logistics. This was shown by the results of a survey of Wiesbaden companies in 2005: the majority of the companies agreed predominantly with statements 2 and 4 to 6 (see graphic). The results reveal that companies in Wiesbaden demonstrate the necessary process know-how and high networking capability.

In addition to process know-how and networking capability as company-related factors to be deduced from the individual economic angle, the factors education, research and infrastructures determine the performance of logistics systems and locations. The aforementioned three factors thus characterise a location’s basic conditions. These factors will be dealt with in the following chapter.