More than one major infrastructure project has run out of control in terms of costs and planning. Enough examples can be found in the Netherlands alone. The Port Authority has learned from these experiences and ensures that it maintains very tight control of the project.
The Port Authority safeguards its investment in Maasvlakte 2 by means of a business case. A business case is an economic model that simulates reality. The model is fed a continuous input of current data about the development of the market, customer demand, construction methods and complementary relevant information. The model subsequently calculates the costs, returns and risks of the project. This provides quick insight into whether the desired return on investment can still be realised. This makes it relatively easy to check whether the project is still on course. If there is a threat that the desired return will not be achieved, the project manager can adjust the course on time. By steering the project on the basis of a business case, the Port Authority can avoid sites from being constructed that do not produce a return.
The 'unforeseen developments' budget entry
At the moment, the input of the business case consists of a constant stream of figures that have been changed by the economic crisis. Although for years, there seemed to be no limit to the port's growth, the Port Authority has taken a scenario of declining growth into account from the outset. On the basis of this scenario, the Port Authority has included an 'unforeseen developments' entry in the budget. However, the main risks have since been covered by the contracts with the contractor and the tenants. For example, thanks to the Design, Construct & Maintain structure of the contract with PUMA, this consortium will be bearing virtually all the risks involved in the construction.
Design, Construct & Maintain
The construction of Maasvlakte 2 is covered by a Design & Construct contract. This means that the contractor PUMA works under an integrated contract. In this arrangement, PUMA is responsible for both the design, the execution and the maintenance in the first five years after completion, as well as for the risks involved in these activities. As a result, the Port Authority is sure to get the land reclamation on time and for a fixed price, according to previously established agreements and without unwelcome surprises.