Country Rapport – Faroe Islands September 18th, 2008 Oyvindur Brimnes, Director Landsverk Oyvindur Brimnes, Director

The Faroe Islands Size: The Faroe Islands consist of 18 islands. The landed area of the country compromises 1,399 km2; and the archipelago is 113 km long and 75 km wide. The shoreline is 1,100 km Population: On January 1st, 2008, the population on the Faroe Islands numbered 48.433, of which 18.000 live in the capital Tórshavn Connections: In 2006, 72% of the landed area and 86 % of the population was connected.

The Faroese Road System Today, the total road system on the Faroe Islands is almost 1,000 km. 460 km are state roads 500 km are municipal roads. All state roads and most municipal roads are paved with asphalt.

The Financial Budget Today, the budget for maintenance is DDK100/m 50 100 150 200 250 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Year Gross National Product Number of vehicles Traffic work on State Roads Length of roads Appropriation for maintenance of State Roads (management) Employees at Landsverki Index 1995 = 100

Maintenance and Investments - 1998 - 2007

Very Little Competition The Faroe Islands are a micro-society, therefore there is a slim market, and very little competition. On the other hand, it is easier to get an overall view of the market. Contractors: Today, there are two local contractors and two contractors from other countries operating on the Faroe Islands Consultants: Today, there are three local consultants and three consultants are operating from other countries.

We don’t follow the trend New investments – Landsverk outsources However, we plan, design and build smaller projects in house Reasons: Lack of competition Keeping the expertise in house

We don’t follow the trend Maintenance – all in house Reason: little competition ( e.g. we are able to produce three times the demand of asphalt) Advantages: Flexibility ( e.g. preparedness in connection with nature disasters) Knowing the local areas ( e.g. winter maintenance) Less need for control of the work Less need for detailed demand-specifications. Disadvantages: might loose focus on efficiency and innovation

How is Landsverk organized? To ensure efficiency, Landsverk tries to organize itself in the same way as the private sector. For maintenance, Landsverk is organized into the following departments: Building Commissioner and Consultant Department Contractor Department Production Department The departments function as individuals, and therefore the departments buy services from each other ( Such as rental of machines)

Future Links - The Eysturoyar Tunnel and The Sandoyar Tunnel There has been much discussion about the future links on the Faroe Islands. Especially when it comes to financing BOOT contra Public Financing. The discussion has lead to the Faroe Islands being without government these days.

Thank You !