The Grensmaas project in the southern Dutch province of Limburg brings benefits to many parties. The widening of the river Maas provides tens of thousands of residents with better protection against fresh floods. Maas villages are being surrounded by green space thanks to large-scale nature development. Companies are earning money from gravel and sand extraction. And the government is reducing its social costs. In 2016 ING, which was involved in the Grensmaas project from the start, facilitated three new green loans through ING Groenbank.
Because parts of the country are below sea level the Netherlands takes flood defence very seriously. The Delta Works in the west of the country are famous all over the world. The methods used to mitigate the flood risk from rivers in the eastern Netherlands are less well known. In addition to dyke reinforcement they are specifically aimed at creating more room for the river. This is done by deepening the rivers and widening their floodplains, partially restoring the original river course.
The Grensmaas project in Limburg leads the way in ‘giving room to the river’ in this way, explained Kees van der Veeken, director of Consortium Grensmaas B.V., which is carrying out the Grensmaas project, since 2005. He enjoys talking about how the mega project came into being. “Limburg is the only province in the Netherlands where gravel extraction takes place. In the past, gravel companies focused solely on mineral extraction, leaving behind a lake after completing their activities. While such lakes could be used for things such as water sports, they offered little other added value to society. This is how lakes such as the Maasplassen in central Limburg were created. At the time the government placed no other demands on the gravel industry. In the 1990s provincial executives and environmental organisations campaigned explicitly for more nature development around gravel extraction sites under the slogan Green for gravel. At the same time the issue arose of mitigating the risk of high river levels, an issue that gained urgency after the floods of 1993 and 1995 in Limburg. That’s when Green for gravel and flood protection were linked up.”
More room for the river
The debate surrounding gravel extraction and flood protection culminated in the Grensmaas project, in which contractors, gravel producers and the Dutch Society for Nature Conservation (Natuurmonumenten) all work together. Rijkswaterstaat Maaswerken, the public works body involving collaboration by the province and central government, is responsible for ensuring that the contractual agreements of 2005 are met.
The project has various objectives which are all worked on simultaneously: river protection, nature development and the extraction of 54 million tonnes of sand and gravel. Extraction of these minerals takes place along the banks of the Maas and close to the river. The gravel pits that are created as a result are replenished immediately to give nature a free rein. The activities also include the construction of work roads, viaducts and bridges. The total cost of the works – around € 550 million – is covered by the proceeds of the sand and gravel extracted. Which means that the project is cost-free to the taxpayer.
A lot of water went under the bridge before the project got off the ground. There was a huge amount of red tape, with the project requiring almost 10,000 permits. It was also quite a job to get all the stakeholders on the same page, said Van der Veeken, with a public-private partnership of this size being something that took some getting used to for all the parties, including the government. Consortium Grensmaas handles everything itself. “We are responsible for purchasing the land as well as for the engineering, preparation and execution and even for providing nature areas. All the government has to do is ascertain that we fulfil the contractual requirements.”
Renegotiating the financing
The project was launched in 2008, the year that the financial crisis hit, and at one point during that year it was hanging by a thread. Demand for construction materials collapsed as a result of the crisis. The projected annual production level of 5 million tonnes of gravel was not achieved with demand falling back to 3.5 million tonnes. This meant that the project was operating at a loss. In light of the exceptional circumstances the government stepped in with a revised plan: the Consortium was given a year’s respite and was only required to build two rather than three production ports.
In 2016 ING, which was involved in the Grensmaas project from the start, facilitated three new green loans worth a total € 34 million through ING Groenbank (green bank). Given the low interest rates after the crisis ING was able to extend the loans on very favourable terms, albeit that new bank guarantees were required from the shareholders.
Extra incentive
Arjan van der Lee, involved in the Greenmaas project on behalf of ING Corporate Clients, describes it as an extraordinary project. “The financing has been a challenge from the start because the costs come before the returns. We were the only bank prepared to try to find a solution. We were willing to go the extra mile and think ahead. What you also see is that the broad sustainable nature of the project gives colleagues at ING an extra incentive.”
Van der Veeken enjoys the collaboration with ING: “ING thinks in solutions rather than in problems or standalone transactions. This was clear right from the start but also during the refinancing after 2008. Employees are able to apply solution-based thinking because they understand the project and have sound knowledge of the market and the sector. For a complex project such as this, that is indispensable.”
For ING’s Van der Lee the most noteworthy thing about the Grensmaas project is that it involves so many stakeholders working together on so many different interests. “The parties here have clearly thought beyond the individual interests. Which incidentally does not simply happen of its own accord. From the start the Consortium has played an important coordinating role in getting all the parties involved in the higher objectives of the project. ”
Say what you do, do what you say
One important challenge for the Grensmaas project was gaining the support of local residents in Limburg. Initially they were sceptical, reasoning that they, unlike people in other parts of the Netherlands, were having to stump up the costs of their flood protection measures themselves. Now that the local people can see what the benefits are, in terms of nature and better protection, sentiment has changed, emphasised Van der Veeken. “There is widespread support now.” Getting residents involved was crucial to achieving this. Van der Veeken explained that the Consortium listened to the concerns and objections of local residents in the region and involved them in devising solutions. Asked to give an example, he said: “We organised the gravel extraction so as to keep noise pollution within reasonable limits. We achieve this by using hydraulic underwater extraction rather than working with traditional dredging machines.”
The communications surrounding the work were also crucial, according to Van der Veeken. “We were very clear about what we were going to do and where, at all times following the adage ‘say what you do and do what you say.’ If residents know what is going to happen they are less inclined to complain, certainly if the work is then executed strictly according to schedule. Should things not go according to plan – as can sometimes happen in our sector – we communicate this clearly and immediately.”
Once every 250 years
The people of Limburg will shortly be rewarded for their patience with the safety objectives set to be met as soon as the end of 2017. This will make living along the Maas safer for tens of thousands of families, according to Van der Veeken. The improvement is impressive, according to the director of Consortium Grensmaas. “In the early 1990s the theoretical chance of flooding was once every 20 years. Following various interventions on the dykes, that improved to once every 50 years. After completion of the project the flood risk will have gone down to once in every 250 years.”
The nature objective also provides great perspectives. Van der Veeken: “We look after over 1,000 hectares of nature reserve. We are working with Flemish parties to create RivierPark Maasvallei (Maas Valley River Park), a wonderful new 2,500-hectare cross-border nature area, featuring Konik horses and Galloway cattle. As this develops over the coming years it will feel like being in the Loire valley.”