The province of Limburg has insufficient control over the major investments it has made in regional economic developments. This is the conclusion of the Southern Audit Chamber in a study presented on Friday.
Strategic management, supervision and accountability must become more extensive and effective than is currently the case. Risk management must be improved. The same applies to the provision of information to the Provincial Council. The Limburg parliament itself could also monitor some of the projects more closely.
The Court of Audit examined investments in three projects: Maastricht Aachen Airport (MAA), the Minewater project in Heerlen (heating and cooling with water from the corridors of the former Oranje-Nassau III coal mine) and the Brightlands Campus Greenport Venlo. These three investments alone will amount to approximately 190 million euros in provincial money in the coming years.
Limburg has also invested millions of euros in other projects, including campuses in Sittard-Geleen, Heerlen and Maastricht. The province can do this thanks to considerable equity, which is mainly due to the sale of its shares in the energy company Essent to the German RWE in 2009 (proceeds: 1.1 billion euros).
No exit strategy
The Court of Audit appreciates that Limburg shows courage in socially important projects that cannot be achieved with private capital alone. But the very fact that the province had to act as a 'rescuer' in each of the three investments examined makes it clear that there are high risks involved. If things go wrong, the financial consequences will largely be borne by the province and not by other partners. The Limburg investments appear to be open-ended investments. Exit strategies are lacking.
Many of the investments are at some distance from the province, because they are arranged in public-private partnerships. Limburg should nevertheless act more actively as a shareholder and supervisor. Especially because in many cases it is the largest investor and runs the most risks. In the Limburg government, the internal division of responsibilities, supervision and contradiction are also not in order. This can ensure that the view of investments is not sufficiently critical.
Role of the Provincial Council
In recent years, the Provincial Council has taken its role seriously, especially in supporting MAA, as has been extensively debated. At the same time, the representatives only ask limited questions when providing regular information and investigating setbacks. Insight into the precise decision-making within the three projects is lacking or very limited.
The Provincial Executive (GS), the executive council of Limburg, says it takes the criticism and advice “to heart”. The province had already initiated many of the improvements.
GS see nothing in exit strategies. The extensive provincial investments actually provided a strengthened future perspective for MAA, the Minewater project and the Brightlands Campus Greenport Venlo, GS believes. “A renewed discussion and decision-making about the future of these projects would again lead to uncertainty and therefore to risks.”
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