From now on, construction company Ballast Nedam will ignore tenders for the construction of large, complex buildings. To make the risks in large projects more manageable, the construction company from Nieuwegein (1,936 employees) will focus on projects that are “well-developed and repetitive in terms of construction methods” and where it can re-apply expertise – the construction company stated at the presentation of the annual figures. So prefer houses that you can build more often than large towers that are only built once. The company saw its turnover rise to 1.4 billion euros in 2022 (2021: 1 billion), the net result went from 42 to 31.7 million.
It is not the case that Ballast Nedam is no longer accepting major projects at all, a spokesman emphasizes. Infrastructure works are still being built, and as long as the construction projects fit within the new course, the construction company will continue to carry them out.
A year full of thunder
The announcement cannot be seen separately from the period of more than a year in which Ballast Nedam was at odds with other market parties on major projects on several occasions. For example, Schiphol Group terminated the collaboration for the construction of the new A pier at the end of 2021; after a conflict about the design, there was a considerable delay.
Last autumn, feelings about the delayed construction of Gasunie’s nitrogen plant in Zuidhorn in Groningen ran so high that main contractor Air Products refused 150 Ballast Nedam employees access to the construction site in January. The people of Ballast Nedam are still not welcome there, even though the factory is almost complete. Ballast Nedam has stated that it would like to complete the work.
The construction of the prestigious Galaxy Tower in the station area of Utrecht is also in trouble after months of delay. Ballast Nedam and installation company Homij are at odds with De Lelie Vastgoed, the client of the 90-metre high hotel-residential complex. The question, as is often the case, is who is responsible for the delay and what the amount of compensation should be. While that conflict is being fought out in court, work on the construction site has been at a standstill for months.
Read also: Billion dollar job? The big builders thank you for it
Risk averse
Ballast Nedam is not the first construction company to want to take fewer risks. Large contractors, who realize projects worth hundreds of millions of euros on thin profit margins, often run into problems due to cost overruns or delays. Because if something goes wrong in such a mega project, it immediately goes very wrong. The most notorious examples come from the construction of infrastructure. Projects devouring millions such as the North/South line, the Zeesluis IJmuiden, the Zuidasdok and the repair of the Afsluitdijk are prompting builders to adopt a more reserved attitude. For example, BAM has for several years no longer taken on construction projects exceeding 150 million euros, if it has to pay for the costs if things go wrong. Heijmans also states that it is dealing with risks more consciously.
In order to allow high-risk projects to go ahead, experiments have recently been started with new forms of tendering in which the client and contractor jointly estimate in advance where possible cost overruns or delays may occur. Large projects are also tendered in separate parts. For example, the Zuidasdok project, the large-scale renovation of Amsterdam Zuid station, has been ‘cut up’ into separate sub-projects. It was thanks to these conditions that Heijmans decided to return to the project from which it had left with banging doors: the builder from Rosmalen is going to renovate the De Nieuwe Meer interchange near Amsterdam on a large scale.