Ambitions cost Dutch province 29 million euros

2nd July 2010, Comments 0 comments


A failed housing project in the north of the Netherlands has cost the provincial government of Groningen 29 million euros.

The Blue City project, which began in 2004, was aimed at developing one of the country's remotest rural areas into a desirable, luxury residential zone surrounding an artificial lake.

The government's Northern Audit Office presented its report on the ambitious project on Thursday. The Blue City project was inconsistent and risky, and the Groningen government ignored warnings and criticism, the audit report says. The office found that the province can expect no return on its 29 million euro investment, most of which went into the purchase of the land.

Depopulation Of the 1,500 building plots, the province has so far sold only 183, on most of which homes have been built. The office report says it is unlikely that the province will be able to recoup the 29 million euros, given the number of competing housing projects in the north, coupled with the increasing depopulation of the Dutch peripheral regions, of which northeast Groningen is one.

The Audit Office is critical of the provincial government, saying that it should not have accepted that two private parties withdrew from the public-private partnership. "Financial risks were not anticipated by the province, but left on the plate of the private partners. The provincial government failed to see that they would be left with bills to pay if the private partners pulled out," the office report says.

Political fall-out The report is highly critical of the decision-making process towards the Blue City project. "At crucial junctures, the provincial executive was denied essential information on which to base their decisions. And when the going got tough, the executive did not share its information with the provincial parliament. Few involved appeared to be aware of the rulles which apply in such circumstances."

The provincial government has accepted the conclusions and criticism of the audit report. It is not yet clear whether this will have any political fall-out.

© Radio Netherlands Worldwide

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