Faroese contractor seeks 500,000 krona compensation after Tórshavn cancels tender

Faroese construction firm HHansen is demanding 500,000 krona in compensation from Tórshavn municipality after winning a tender for a boathouse development in Kollafjørður, only for the municipality to cancel the process and launch a new one for residential and municipal buildings instead, Kringvarp Føroya reports.

The dispute centres on a plot in Lygnnes, Kollafjørður, where the original 2023 tender specified a boathouse. HHansen submitted the lowest bid at 5.173 million krona, beating a rival offer by 278,000 krona. The company was informed it had won.

But in June 2025, the municipality changed plans, opting instead for residential and municipal buildings. On 18 June, the council approved cancelling the existing boathouse tender, releasing the contractor from obligations, and allowing for possible compensation. HHansen was notified the same day.

By April 2026, the company had still not received compensation. Its lawyer, Christian Andreasen, stated in a 20 May letter that nearly two years had passed since HHansen was awarded the work and the municipality withdrew it, during which the company had to turn down other jobs to remain available.

The municipality re-tendered the plot, and this time Smápartafelagið Við Sjógv—the same firm that placed second in the original boathouse tender—won with a bid 100,000 krona lower than HHansen’s.

HHansen is now demanding 500,000 krona, which it claims represents lost profit, and further insists the municipality acknowledge liability and honour the original contract.