Economic responsibility:
Port of Hirtshals continues port expansion with new Hirtshals model
Port of Hirtshals has just cancelled its ongoing tender and is now dividing the port expansion into several phases, with improving navigational conditions remaining the main focus. With this decision, the port aims to demonstrate economic responsibility and assures that it will not affect the ambitious projects the port is involved in.
Hjørring Municipality and Port of Hirtshals are continuing their expansion plans for the port with the so-called “Expansion North”, now with a new setup. The project for the expansion of the northernmost part of the port will now be divided into phases in a so-called Hirtshals model, with an initial focus on improving navigational conditions. The new model will affect the pace at which the expansion progresses but will not influence the port's other activities.
It is important that we always maintain a healthy balance between our expenses and potential income at Port of Hirtshals. I can best compare the decision to split the port expansion into phases with a family who wants to renovate and extend their house. They may have a wish to complete everything within six months, but if the conditions change due to unforeseen technical challenges or if the budget exceeds the set framework, they may have to wait a year or two to build a new carport or consider alternative, cheaper solutions. It is always a sound principle to have an overview of your cash flow, says Michael Lundgaard Thomsen, Chairman of Port of Hirtshals.
Port of Hirtshals remains a port in growth and is continuing its work on projects such as a large-scale CO2 storage project and the ambition to become Europe's greenest port. The cancellation of the tender reflects the desire by Port of Hirtshals’ board to ensure that the expansion - as with the rest of the business - proceeds in a responsible manner. Therefore, the expansion will proceed in phases that match customer needs and the port's financial capacity.
So it is timely due diligence to cancel the tender and continue the port expansion in a different way. We are still fully committed to completing the expansion, but we are breaking the large project into smaller pieces instead of doing everything at once. This simply means that we are cutting our coat according to our cloth. The port has a solid economy, and last year we even exceeded our financial expectations. It is incredibly important that we show economic awareness because no one is interested in us taking on more risk than we are willing or able to bear, says Michael Lundgaard Thomsen.
Port of Hirtshals had budgeted expenses of 1 billion DKK for the expansion, but the indicative bids were significantly higher. The combination of higher material costs and uncertainties about general economic developments led to higher expenses for the port expansion than initially estimated. Therefore, the port is now continuing the expansion with a new model, where the expansion proceeds at a pace that is financially responsible.
Green projects continue as planned
Port of Hirtshals’ ambition to become the greenest port in Europe is not affected by the decision to cancel the tender. The port continues with its plans to become a hub for the production and consumption of renewable energy and to establish partnerships with companies working on green transition. As an example, Port of Hirtshals recently announced that the company Green Energy Vault will make a 500 million DKK investment at the port, and earlier this year, the company Norwegian Hydrogen decided to establish a large hydrogen production facility at the port.
The cooperation within Greenport Scandinavia to establish Northern Europe’s largest CO2 hub at Port of Hirtshals also continues as planned. This project will make Port of Hirtshals a central point for storage and shipment of millions of tons of CO2 annually to empty oil and gas fields in the North Sea.
As the owner of Port of Hirtshals, Hjørring Municipality fully supports the decision to cancel the current tender. This helps ensure that the expansion progresses at the right pace without exposing the port — or the municipality's residents — to greater financial risk than necessary. Port of Hirtshals is a vital business catalyst in the municipality, and we look forward to following the many exciting projects the port is working hard to make a reality every day, says Søren Smalbro, Mayor of Hjørring Municipality and Deputy Chairman of Port of Hirtshals.