IJmuiden Scheme to Cost More Than Expected
- Business & Finance
Based on the latest available information, Royal BAM Group expects a considerable project loss in 2017 on the sea lock IJmuiden.
Rijkswaterstaat awarded the OpenIJ consortium the contract to design, construct, finance and maintain a new sea lock at IJmuiden in mid-2015.
The contract value is approximately €600 million. Construction activities are carried out by a 50/50 joint venture between BAM and VolkerWessels.
According to Royal BAM, the loss mainly relates to the redesign of the two caissons (the construction holding the lock doors) to prevent torsion and cracking during immersion. The new design specified reinforced caissons and heavy temporary structures.
BAM CEO Rob van Wingerden commented: “We are very disappointed with this significant cost overrun. We are working with our joint venture partner in close consultation with the client to deliver this important project for the Amsterdam region. Despite this setback we remain confident we are on the right track to realize our strategic ambitions.”
Recent implementation works revealed significantly higher costs for specialist materials and equipment and personnel over the prolonged construction period. For BAM, this will lead to an estimated additional project loss of around €55 million in the fourth quarter 2017. As a consequence, the company expects an adjusted result before tax for the full year 2017 which will be substantially lower compared to 2016.