The Port of Rotterdam and Maasvlakte 2 Tony Kippenberger, MBA, Director of the Centre for Strategic Business Studies Ltd

The Port of Rotterdam and Maasvlakte 2 Tony Kippenberger, MBA, Director of the Centre for Strategic Business Studies Ltd Case Study December 2012 © The Stationery Office 2012 2 The Port of Rotterdam and Maasvlakte 2 Contents Introduction 3 History 3 Expansion 3 The problem 3 The Maasvlakte 2 project organization 4 The project plan 4 Next steps 5 A setback 5 The project gets under way 6 The end of Phase One 7 The role of PRINCE2 7 Acknowledgements 7 Trademarks and statements 8 © The Stationery Office 2012 The Port of Rotterdam and Maasvlakte 2 3 handle the rapidly increasing trade and cargo shipping now using Introduction the Meuse and Rhine rivers. Through these rivers, Europoort was On Wednesday 11 July 2012, the map of the Netherlands changed connected to the Ruhr area in Germany as well as to Switzerland, for ever. Her Majesty Queen Beatrix gave the sign to close the Belgium and France. 11-km seawall around 2,000 hectares of new, man-made land As a result of this rapid growth in both demand and capability, jutting out into the North Sea. In doing so she gave the Port of between 1962 and 2004 Rotterdam became the world’s busiest Rotterdam, and the country, a new shape. port. Although it has now been overtaken (first by Shanghai and Thus a major step in the construction of Maasvlakte 2 – a project more recently by Singapore), it remains the third-largest port in first started in 2004 – was reached a year ahead of schedule. The the world, and the largest in Europe, handling over 35,000 first of a multitude of ships will come into this huge new port seagoing and 130,000 inland vessels each year. facility in spring 2013. Rotterdam’s entire port and industrial complex covers 10,500 This case study provides the background to this huge €2 billion hectares and is 40 km in length, stretching from the city itself to infrastructure project, which has employed 20,000 people, is now the Maasvlakte along the Nieuwe Waterweg canal. running ahead of time, remains within scope and is on budget, and explains how the use of PRINCE2® has made this possible. History The Port of Rotterdam can trace its heritage back to the 14th century, when the present-day city of Rotterdam was a small town of around 2,000 inhabitants with some simple docks on the banks of the Nieuwe Maas river – one of the myriad of rivers in the Rhine-Meuse delta that reach the North Sea on this part of the Dutch coast. Rotterdam’s early success can be credited to the building of a ship canal (the Rotterdamse Schie) around 1350. This allowed Rotterdam to become a local trans-shipment centre between Holland, England and Germany, and in turn provided the impetus The problem for its growth into a maritime city associated with the Dutch East India Company, which was formed in 1602. Even though it does not provide employment on a scale to match its physical size, the Port of Rotterdam is nevertheless the Netherlands’ biggest economic engine. Expansion Europe’s largest port has often come close to its limits during its history, as the bursts of expansion show. In 2004, the port was By the middle of the 19th century, Rotterdam was already one of once again getting close to capacity. The trans-shipment of the largest port cities in the world, mainly because of the growth containers increased by 16% in 2004, to 8.2 million TEU,1 up in trade between Germany and Great Britain. However, the from the previous year’s 7.1 million TEU. The port was expected increase in shipping traffic created a capacity problem. There to handle around 9 million TEU during 2005 and projections were too many branches in the river delta, making the port indicated that it could grow to 12 million by 2010. difficult to reach, and there was a constant battle with natural silting-up in the Rhine-Meuse delta. This was resolved by building Rotterdam had almost exhausted its space for any further a ship canal called the Nieuwe Waterweg (‘New Waterway’), increase in container trans-shipment, with only a few hundred which opened in 1872, with a length of about 20 km (12 miles), hectares of rentable sites available. Moreover, these small sites providing a clear waterway for ocean-going vessels. As shipping were mostly situated a considerable distance from the sea. It was and trade grew, the port spread to the south bank of the river to already obvious that more intensive use of the existing port site find space for expansion (see the orange section on the map). was the only way to absorb the increase in container trans- shipment up to 2010. But beyond that, new capacity would have In the years between the two World Wars, the port and harbour to be found. expanded to the west of the city (red sections on the map), along the side of the Nieuwe Waterweg. This in turn was followed by further extensions after 1946 and again after 1960 (dark blue sections). The greatest expansion, however, occurred in the decade between 1960 and 1970 (light blue section), when the 1 TEU refers to a 20-foot equivalent unit, a measure used for capacity in huge area further west was developed as Europoort, an container transportation. It is based on the volume of a 20-foot-long (6.1 m) container: a standard-sized metal box which can be easily transferred industrialized, extended series of harbours and basins that could between different modes of transportation, such as ships, trains and trucks. © The Stationery Office 2012 4 The Port of Rotterdam and Maasvlakte 2 Unfortunately, in the early 2000s, the Port of Rotterdam was struggling with several issues. There was national concern, The Maasvlakte 2 project especially in the Dutch House of Representatives, about large organization infrastructure projects. This reflected public opinion, which had become increasingly negative because such big, costly projects The Maasvlakte 2 project organization was set up as a separate always seemed to come in late, outside scope and over their part of the Port of Rotterdam Authority. The organization was already expensive budgets. There were also basic doubts about designed to prepare for the port’s expansion thoroughly, the benefits that such projects actually brought. None of this was transparently and professionally, and then to commission its helped by the first Maasvlakte project, started in the 1970s, construction. The project organization would also keep its own which was over budget and was seen as poorly managed. financial accounts. The Port of Rotterdam Authority therefore established a Project Board especially for the project, with a This was not a good climate in which to propose a major new Maasvlakte 2 Project Director who would be accountable to the project expected to cost several billion euros, especially with a Port of Rotterdam Authority’s Board of Management. A Tender Minister of Transport, Public Works and Water Management who Board consisting of external tendering experts would provide appeared to have doubts about the real benefits that advice on the call for tenders and contracting. On request or on Maasvlakte 2 would bring. its own initiative, an Audit Committee would advise the However, by 2004, in a decision known as Key Planning Decision- Supervisory Board of the Port of Rotterdam Authority about the Plus, the Dutch government agreed in principle that a major project. A Sustainable Development Advisory Group, consisting project called Project Mainport Development Rotterdam (PMR) of leading specialists in this field, would examine possibilities for should go ahead. This overall project would have three large building, furnishing and operating Maasvlakte 2 in a sustainable sub-projects: the Maasvlakte 2 project would create new port sites way. There was also a User Sounding Group, which included and basins close to the North Sea; the so-called ‘750 ha’ project representatives of the Port of Rotterdam Authority’s clients. This would construct and furnish a new wildlife and recreational area group would advise the project organization on the logistical and in the immediate vicinity of Rotterdam; and the ‘Existing industrial wishes of future users. Rotterdam Area’ project would bring about more intensive use of the existing sites within the city. While central government would coordinate the PMR project, the three sub-projects would be managed by different parties. The Port of Rotterdam Authority would undertake Maasvlakte 2, the Province of Zuid-Holland would be responsible for the 750 ha project, and the Municipality of Rotterdam would manage the Existing Rotterdam Area project. The project plan In June 2004, the Maasvlakte 2 project organization asked four project management consultancies to present their ideas about how a large project of this nature could be controlled in such a way that the recurrent doubts could be resolved and any prospective partners and stakeholders reassured. One of the four organizations invited was Dr Richard Moret’s Ambition Group, based in Rotterdam, which made the case for using the PRINCE2 project management methodology. After serious initial doubts about PRINCE2’s suitability for such a large infrastructure project, the Authority’s Chief Executive, members of the Authority’s Procurement Office and the Maasvlakte 2 Project Director, Ronald Paul, decided that PRINCE2 would be tested by using its methodology to prepare the necessary project plan. © The Stationery Office 2012 The Port of Rotterdam and Maasvlakte 2 5 Time was short since the plan had to be ready within three about the same time, the APM Group, the PRINCE2 international months, by the end of September. With no time to prepare or accreditation body, launched a PRINCE2 Maturity Model (P2MM) offer any PRINCE2 training, Ronald Paul nevertheless confirmed to enable organizations to check how mature they were in on one Friday that, as from Monday, PRINCE2 would be used.

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