Dutch lock PPP hits Bam

Contractor Royal Bam Group has revised its outlook following cost overruns on one of its PPP contracts.

The firm said it expects to suffer “a considerable project loss” in 2017 on the Ijmuiden sea lock project, which it is undertaking in a joint venture with VolkerWessels through the OpenIJ consortium, which signed the deal in October 2015.

The loss is expected to reach €55m in the fourth quarter of 2017, with Bam warning that its pre-tax results for the full year will be “substantially lower” than the previous year.

Valued at €600m, the contract is to design, build, finance and maintain a new sea lock at Ijmuiden and is the largest scheme in the Dutch government's locks programme.

Bam said that the loss mainly relates to the redesign of the two caissons (the construction holding the lock doors) to prevent torsion and cracking during immersion.

“Recent implementation works revealed significantly higher costs for specialist materials and equipment and personnel over the prolonged construction period,” said Bam.

Chief executive Rob van Wingerden said that while the firm was disappointed” with the cost overrun, it remains “confident we are on the right track to realise our strategic ambitions”.