GOTTHARD BASE

TUNNEL
SUBMITTED TO: PROF: RAJESH KUMAR

SUBMITTED BY: ANANT BOTHRA

(190201016)
INTRODUCTION
AlpTransit Gotthard which was a 100% subsidiary of Swiss Federal Railways was established in May
1998 to deliver the project for the 57km Gotthard Base Tunnel. Given that the mobility requirements
of Switzerland’s population had been progressing over the last century and complementing that is
the strategic location at the crossroads of the continent made the project an attractive option to the
Swiss people. Given below is the timeline depicting the timeline for the development of Gotthard
Base Tunnel:

 1882: The first Gotthard Base Tunnel was opened (15km) which connected Goschenen and
Airolo by train.
 1980: The Gotthard road Tunnel was opened (16.9 km)
 1992: The Swiss voters approved the proposals submitted by the government for the
construction of the New Railway Link through the Alps (NRLA) which included the Gotthard
Base Tunnel.
 1998: FinoV financing project was approved.
 1999: The first drill and blast cycle marked the beginning of the Gotthard base Tunnel. (4 th
November)
 2010: Gotthard Base Tunnel breakthrough (East tube in 2010, west tube in 2011).
 2013: The travelling tests were conducted.
 2016: The operations of the Gotthard Base Tunnel was started. (June 1)

Below are some key facts related to the project:

 Stemming from an idea dating as far back as

1947, the Gotthard AlpTransit Project proposals
were granted approval in Switzerland in 1992.
 The project is owned by AlpTransit Gotthard
which is a 50/50 joint venture between the Swiss
state and Swiss Federal Railways, who are
responsible for the overall running of the
project.
 Length: 152 km, including two 57-kilometer long
sections in Bodio and Faido
 Depth: rock overburden of 2300 m
 Benefits:
o 1 hour time gain between Zurich and
Milan
o CHF 400 million transportation revenue
expected
o Reduced traffic and emissions
 It required 10 hours to travel from Lucerene to
Milan in 1882 by train which was reduced to 2
hours and 48 minutes.
 Every day, 260 freight trains (160km/h) and 65
passenger trains (200km/h) will pass through the
GBT in a journey taking as little as 17 minutes.
 2,600 people worked on the tunnel, including top brass at AlpTransit Gotthard Ltd, the
company responsible for building the GBT.
  The project cost $12.5bn to build, more than the gross domestic product of Nicaragua.

PROJECT STRUCTURE
Given the framework of the project and the unique size of the Swiss government the parliament
passed a framework related to the project which was a premise for the construction of the tunnel
for NRLA (New Railway Link through the Alps). The major parties involved in the project are:

 The Swiss federation who were the sponsors of the project.

 The Swiss Federal railways who were the sole shareholders of ATG and the future operators.
 The consultants, contractors and suppliers who are having a contract with ATG.
 Also, the community who are the stakeholders of the project.

The figure below describes the organization of the people involved:

PROJECT FINANCING
About 75% of the total required credit was covered by the contribution of FinoV. The remaining 25%
of the credit was required and was to be funded through the private capital market. The income of
the fund from FinoV was to be supplied through the sources written below:

 LSVA – the heavy road vehicle tax

 From the share of the existing mineral oil tax
 Also, an additional 0.1% on VAT.

The payback period was estimated to be 23 years. Given that the fund would be empty in the
inception but would gradually rise rapidly due to the rising construction workers and other costs, a
Federal loan of 4.1 Billion CHF was provided by Swiss Federal Government.

The project financing model aimed in assuring that there is clear and stable financing of the whole
project independently from the budget and is not affected by political changes. It also aimed at
avoiding delays or stops in the construction time frame due to the lack of financial resources.

The request set by the Swiss Federal Government with ATG was directed in the agreement
concurred between these two gatherings. The cost administration process was commonly set up
with respect to the ideal accomplishment of the NRLA Controlling Instructions (NCI), characterizing
the conclusive control figures, the sort and recurrence of revealing (at regular intervals) and the
treatment of adjustments being set down correspondingly. In every status report, the revealing and
correspondingly examination of Cost premises, Cost circumstance (grants, paid solicitations,
extra/diminished expenses for development, swelling, last solicitations) and Cost forecast must be
incorporated.

In 2008, FOT approved changes cost reference sheet was prepared. The snapshot of the sheet is
provided below:

The evolution in the costs and the potential risks have been monitored by ATG on a quarterly basis
and are reported to the authorities on a half-yearly basis. The figure below shows that the final costs
will be lower than the credit of CHF 13,157 Billion.
Corresponding to the Gotthard base-burrow just, the expansion of the credit from unique 6.323
billion Swiss Francs to 9.861 billion Swiss Francs (some portion of the previously mentioned 13.157
billion Swiss Francs), comparing to +53% without expansion, was not sudden, however was in any
case noteworthy. Nearly the half of the extra costs get from varieties emerging from orders gave by
the Swiss Federal Office of Transportation (FOT) for reliably regarding the guideline to convey a
passage with cutting edge Safety and innovation. The additional expenses from ground dangers,
which couldn't be straightforwardly impacted, just made up 9% and in this manner just a 6th of the
all-out increment.

VALUATION
Given that the project was developed by the government with respect to the welfare of the public
thus, the valuation will be irrelevant as it is developed to yield benefits to the stakeholders and the
vision is seen to be in the long run. The payback is although said to be in 27 years but other
estimates envision it to be for around 60 years. Hence, since the principle in hand is the overall
development and the convenience of the stakeholders thus, valuation of the project is not done.

PROJECT RISKS
Following are the risks associated with the construction of Gotthard base Tunnel:

 The financial reserves used by government in purchase order changes so as to enhance the
operational safety or to enhance technical quality changes may lead to problems. There may
 arise financial gaps due to which there might be adverse impacts on the realization of the
two base tunnels at Zimmerberg and Ceneri originally planned for 2006.
 Another risk was that the permit risks wherein if the construction permit of the
northernmost section of the base tunnel wasn’t obtained by the end of 2003, then the
project wouldn’t be able to meet its deadline.
 The railway lines adjacent to the Gotthard and Ceneri Base Tunnels haven’t been legally
defined which created a strong political opposition in the regions concerned and influence
the construction process of the base tunnel.
 There were risks in underground construction work. These risks included all the risks arising
from the geology sphere along with safety and other hazards. There were 9 cases reported
of the deaths of then construction workers in the site.

CONCLUSION
Taking everything into account, the achievement ought to be underlined of a reasonable and
adaptable agreement model, which permitted dealing with all possibilities and all structure changes
during 25 years of plan and 17 years of development just as the achievement of a proficient Project
financing model and of a sufficient Project association. It merits featuring the significance of open
discourse between the gatherings and the rule that looking also, distinguishing a commonly
concurred arrangement ought to be the initial phase if there should be an occurrence of issues,
while the conversation about risk and legally binding results just should come in the following one.
To wrap things up, the Swiss models SIA have demonstrated their qualification for the plan and
development of huge underground structures, benefitting themselves of the experience assembled
during the acknowledgment of this remarkable task in part of their last corrections.