Delft has had insufficient control of major infrastructural projects for many years. The municipality also structurally spent more funds than were being added to the coffers. This is one of the reasons behind shortfalls totalling in excess of €141 million.
These are the conclusions drawn by a city council fact-finding committee following an investigation into the organisation and decision-making processes during the Spoorzone, Harnaschpolder and Sint Sebastiaansbrug building projects. The city council decided that this investigation was necessary in order to establish how it could come to pass that Delft is in such financial difficulty.
The drop in municipal assets was primarily due to two residential projects in Delft: Spoorzone and Harnaschpolder. However, the seeds for the current financial situation were planted much earlier; the budgets for the past decade consistently saw expenditure exceed income. The recommendation made by the Strategy and Control Department in 2005 to make long-term efforts to increase the municipal financial reserves was ignored.
The committee concludes that the economic crisis certainly played a role, but that there were also other reasons behind projects ending up being more expensive than planned, such as optimistic planning and wishful (financial) thinking.
None of the projects were completed within the original timeframe. The original completion date for the Sint Sebastiaansbrug was 2007, but an estimation made at the end of 2014 suggested that it wouldn’t be completed until 2019 at the earliest. The plans released in 2007 for the Spoorzone indicated that the project would be completed in 2019, but due to developments on the housing market and the course of the project thus far, the current assumption is approximately 2025.
Wishful financial thinking was primarily an issue with the Harnaschpolder and the Spoorzone. In the case of the latter project, the rose-tinted estimations were made from the outset, meaning that constant adjustments were necessary. For example, the tunnel variant, the assumed course of action in 2005, turned out to be too expensive. Following an external investigation conducted in 2008, it became apparent that the risk was too large to be borne by the municipality itself.
The committee states that ‘the municipality can count itself lucky’ that the State assumed the construction risk. If it hadn’t, the committee concludes that the municipality would have faced even more severe financial difficulties at an even earlier stage. The fact is that in August 2015, it became clear that the total cost for the State had already reached €552 million – much more than budgeted.
When it comes to the Sint Sebastiaansbrug, contrary to the official recommendations, work was contracted out in order to complete the bridge as soon as possible. Just a few months later, the tender was withdrawn, partly because of risks that were highlighted earlier in the official report.
All in all, the committee calls the quality of both the Delft and external project organisations into question. The committee has advised the municipality to develop a High-Risk Projects Regulation (Regeling Risicovolle Projecten) before the end of 2016, in which Delft outlines how the decision-making process for major projects should proceed and how concerns such as time, funding, quality and risks should be managed in the future.
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