In a suit and in a good mood, BAM chairman of the board Ruud Joosten (58) enters the construction shed, a bag under his arm with work shoes and a construction helmet. There is a tour in Haarlem, where BAM is making three housing blocks of a housing association more sustainable. An elderly couple who have just come out of their homes are asked whether the work will not cause too much nuisance. “We are very happy here with everything you do,” says the lady. “I would say that too, with all these people at your door,” Joosten grins. He looks at ease on the scaffolding and in the shack.
When Joosten took office three years ago, BAM was in serious trouble. The largest listed construction company in the Netherlands (13,400 employees, a turnover of 6.6 billion euros in 2022) had just issued two profit warnings, the stock price had plummeted and there were losses of millions.
The cause of all this misery was that BAM had choked itself in the previous decades on a number of mega projects in which it had taken on too many risks. Turnover ran into the hundreds of millions, but so did the costs if something went wrong. Due to errors at Rijkswaterstaat, work on the Afsluitdijk took years to complete, which caused BAM’s construction costs to rise by millions. The delayed construction of the Zeesluis IJmuiden became more than 100 million more expensive, and the collapse of the city archives in Cologne due to tunnel work cost BAM another 40 million. Top man Rob van Wingerden couldn’t get things under control and stepped down in 2020.
Ruud Joosten, whose father owned a painting company in Haarlem, was working as an operational director at AkzoNobel at the time. When the position of chairman of the board at that paint company passed him by, a recruiter asked whether he wanted to come to BAM. Although he only knew the construction industry from his role as a paint supplier, Joosten agreed.
Photographs of a prestigious sewer tunnel project in London and of the Zalmhaventoren in Rotterdam hang above his desk at the head office in Bunnik. The CEO of BAM will give an extensive interview for the first time after his appointment. In recent years he had a lot to do, but now there is peace.
What did you find when you first came here?
“In management terms, a company that needs immediate action is called a burning platform. You shouldn’t use those kinds of slogans too lightly, often it’s not too bad. But when I entered here in 2020, I immediately noticed: things are really wrong here. We only had a very thin buffer to absorb blows, and in the first half of the year we wrote a net loss of 235 million euros. It was very exciting.”
At the time, Rijkswaterstaat feared BAM’s bankruptcy, according to internal documents. Was that fear justified?
“Of course. Yes.” Joost is silent for a moment. “In hindsight it is of course easy to keep such a story, now that we have made it. But there have been times when I’ve wondered if it would work out. From the shareholders to the clients, from the accountant to the banks: they all had doubts or walked away. And then it can suddenly go very fast.”
In his first months, Joosten drew up a list with financial director Frans den Houter. The claims, settlements and agreements with banks and the accountant had to work out in exactly the right order. Circled in red: the completion of the Afsluitdijk dossier. A three-year plan was also introduced, which revolved around the disposal of high-risk construction projects and loss-making business units. BAM International, the branch that operated outside Europe, had already slimmed down before Joosten’s arrival and was now completely shut down. Two German and three Belgian subsidiaries were sold and a thousand BAM employees lost their jobs in a reorganization.
Joost speaks seriously and decisively, sometimes with a smile. If the conversation threatens to get too personal, he deftly directs it back to BAM. The CEO loves his job. He says he has no hobbies. “You should not come to me with stamp collections.” After some insistence, he mentions the weekly round of golf on Sundays with his wife. “But that is also just walking and occasionally hitting a ball.” He prefers to talk about the three-year plan that is now almost complete. A handful of the high-risk projects remain, including a large children’s hospital in Dublin, a tunnel between Germany and Denmark and the extensive work on the Afsluitdijk.
Behind you hang pictures of a 22 kilometer long sewerage system and a 200 meter high residential tower. They don’t just hang there, don’t a construction company want to make iconic buildings?
“We are also very proud of those projects, but we no longer do them at all costs. Take the plans for a new Feyenoord stadium, which would put us at great risk. We were clear then: we are not going to do that. We get a press conference from Feyenoord on our roof the next day in which we are dismissed as big crooks because we pulled the plug. When I saw that, I thought: dude, you really don’t know what you’re talking about. Such a top-quality stadium is approaching the billion, for which a wealthy Qatari is ready in England. You don’t have that here. And then the builder just has to take the risk if things go wrong? That can’t be true, can it?”
BAM is now doing well again. The contractor is making a profit again and has a healthy financial household. Significantly, the company will pay dividends again after years. Yet Joost also has concerns. BAM has been in the news several times negatively in recent months. In October, the FIOD and the Public Prosecution Service raided an office in Gouda because of suspected irregularities in foreign projects of the now defunct BAM International. Shareholders, analysts and journalists keep asking Joost about the impact, but BAM cannot respond as long as the investigation is ongoing.
In April, the company was startled by the nightly train accident near Voorschoten, in which a BAM employee was killed. The 65-year-old train driver died when his construction crane was hit by a freight train and an intercity. The funeral coincided with the shareholders’ meeting of BAM, where the accident was discussed at the opening. While the shareholders in Bunnik voted on motions, a minute’s silence was held at all construction sites and in all BAM offices and flags were flown at half-mast.
At the shareholders’ meeting, Joost also had to answer questions about the future. BAM is one of the 29 companies that have been approached by Milieudefensie, which since last year has been attending shareholders’ meetings of companies that are classified as major polluters. The construction sector is a major emitter of CO worldwide2, especially through the production of building materials such as steel, concrete and asphalt. The Milieudefensie campaign officer, accustomed to vague, evasive answers from top executives, kindly but sharply asked whether BAM intends to2emissions in half. “Yes, we think that’s possible, and we’re just going to do that,” said Joosten resolutely. There was no ‘if’ or ‘but’, much to the surprise of the questioner. “Well, that’s very nice to hear. We’re going to hold you to it.”
Joosten sees sustainability as the next big step for BAM. This year an ambitious sustainability strategy was presented, the basis for the course that Joosten wants to follow in the coming years. It must be a real culture change. The total CO2 emissions, which BAM reports as part of its turnover, must be halved by 2030 compared to 2019. According to Joosten, BAM will also look differently at the tenders it is bidding on. “It has to fit into our sustainability strategy, otherwise we won’t do it.” So no coal-fired power plants, but wind farms, coastal reinforcement and homes – BAM’s sustainable housing factory should be operational this autumn.
They are ambitious goals that you want to achieve in a relatively short time. Isn’t that exciting?
Joost smiles. “That is quite exciting, yes. You make a statement as a company. I feel that pressure myself, but parties around us feel it too. Until quite recently, large construction companies and trade associations stepped on the brakes in order to continue working in the same way for as long as possible. I don’t think that will be possible in the future.”
With the new strategy, Joosten assumes that clients are willing to pay more for sustainable construction. So also the largest client in the Netherlands: the government. It is common practice that the contract goes to the consortium offering the lowest price. The major construction fraud affair in the 1990s, in which tenders for government projects were tampered with, did not help.
Will BAM get major clients and the government on board?
“I’m convinced of that. The pressure to build more sustainably comes from all sides. Banks, consumers, legislators, judges. I also notice in government that we are in a development from ‘hard on price’ to ‘quality and sustainability’. More and more often you get extra points in the tender if you can build with electrical equipment. An important signal, because if the government sets higher sustainability goals, it must also set a good example in its tenders. Of course there will be customers who say: give me that diesel machine. So those are customers for whom BAM no longer wants to work in the future.”
Asphalt is one of the most polluting materials in construction. Does that still fit with your sustainability strategy?
This is a very interesting philosophical discussion. Asphalt is indispensable for the Dutch road network, but it has a serious effect on our sustainability ambition. Of course we also know: if we don’t do it, someone else will. For the time being, we therefore opt to develop a way in which the CO2 emissions from asphalt production will drop sharply. If that succeeds and we can produce asphalt substantially more sustainably, then I support it. If not, then I have a problem with it.”
As a developer and house builder, BAM plays an important role in the cabinet’s new-build ambitions. It sold more than 2,000 new homes in 2022 – a fifth less than in 2021. Whether that number will be achieved again this year is highly questionable. Due to rising interest rates and reticence among buyers, the number of homes sold is falling sharply. Investments in new construction are also falling sharply. Housing investors are not happy with the stricter rules for the rental market of Minister Hugo de Jonge (Public Housing, CDA).
Do you have good contact with Minister De Jonge?
“This often goes through the trade association. I have enormous respect for Hugo de Jonge. He fights every day for more houses, and of course he can’t change anything about the rising interest rates. But choices have to be made. Do we want to solve the housing shortage, or reform the rental market? Both don’t work. Last year, investors’ investments were halved compared to the previous year. And that means that only half can be built. We will never reach those 900,000 homes that way.”
Doesn’t Minister De Jonge have agreements for 900,000 homes in the housing deals with provinces? What do you think is going wrong in the decision-making process?
“It is difficult for us that there are so many stakeholders who need to be heard. You see discussion at a local level, from municipalities and provinces to the Vogelbescherming: where should those homes come? For me as a builder this is very frustrating. In the Netherlands we have enough money, enough brains and enough technology – and yet we are only building half of the homes we need. Those housing deals aren’t good enough. It would help if the minister sat down with the provinces and the builders to see where we together have land positions for large-scale construction. There are locations such as the outskirts of Almere or near Rijnenburg [naast Utrecht] where possible. Let’s plan it together, Hugo de Jonge can call us.”