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NCE Live News Updates Wednesday 26 February: Grontmij UK exempt from European cuts; case for dredging pushed

Grontmij’s UK boss has distanced his operation from the group which faces further restructuring after worse than expected annual results; MPs hear case for dredging of rivers

6pm: Dredging would have tackled Somerset Levels flooding, MPs told

The Chartered Institution of Water and Environmental Management (CIWEM) has this afternoon told the Commons Environment, Food and Rural Affairs committee that it was “probable” that dredging would have helped reduce the severity of the flooding on the Somerset Levels.

Past chairman of CIWEM’s rivers and coastal group Martin Whiting told the committee that by referencing its studies into similar floods in 2007 it was able to conclude that it was “probable” that “the duration of the flooding may have been reduced” by dredging.

Whiting spoke after past ICE president Jean Venables had also pressed the case for dredging alongside the need for more permanent pumping capacity.

Venables was speaking in her capacity as Association of Drainage Authorities chief executive.


11am: Improving biodiversity and water quality prioritised ahead of combatting flooding in new environmental land management scheme

Farming minister George Eustice has announced today that the new environmental land management scheme will provide funding for farmers and land managers who deliver benefits for wildlife, improve water quality and create woodland.

From 2016, the new environmental land management scheme will enable farmers to deliver environmental priorities specifically related to their local area, focusing particularly on increasing biodiversity, helping wildlife and improving water quality. For example, if one area isinhabited by rare farmland birds, farmers will be reimbursed for enhancing it. If, in another area, agricultural pollution has affected local rivers, farmers will be able to apply for funding to reduce soil erosion and run-off from their fields.

During European Union negotiations on the Common Agricultural Policy (CAP), the UK pressed for each country to have the option to channel a greater proportion of CAP funding into delivering environmental benefits. As a result, £3.1bn of funding will be available for environmental schemes in Englan. This is a higher proportion of the CAP budget than ever before.

Nearly 52,000 farmers and other land managers have signed up for the schemes, which cover over 6.4M ha – or 70% of farmland in England.


10.30am: Grontmij’s UK operation will avoid cuts in a promised restructuring at Group level.

The restructuring was announced this morning as the firm posted worse than expected annual results.

But UK managing director John Chubb told NCE that his division will not be part of the restructuring.

“We’re absolutely trading well and going in the right direction,” said Chubb. “The UK is now a very solid business compared to a few years ago. We went through a quite significant cost restructuring back in 2012,” he said. “So there are no significant cost reductions planned for the UK.”

The firm’s UK operation reported an operating profit for the year ending 31 December 2013 of £2.1M, up 40% on £1.4M in 2012. Chubb said it marked a turnaround for the division, which was loss making in 2011.

The firm is currently bidding for AMP6 water work and Highways Agency frameworks.

10am: Fehmarnbelt backers say project remains a European priority.

Backers of the Fehmarnbelt fixed link crossing between Denmark and Germany have stated that the project remains a top priority for the European Union (EU).

The EU has allocated £164M for preliminary studies and the conceptual design of the Fehmarnbelt fixed link for the 2009-2015 period. Backers have highlighted how the tunnel project will continue to be supported by substantial funds from the Trans-European Transport Network programme, TEN-T.

This was set out in the infrastructure project support framework, unveiled by the EU’s TEN-T executive agency at the end of 2013.

TEN-T is an EU priority programme for improving transport links throughout the European internal market and will introduce a degree of standardisation into transport systems. According to the framework, there will be an initial core network of nine multi-modal transport corridors, which are expected to be completed by 2030. The core transport corridors comprise: two running from north to south, three from east to west and four more running diagonally across Europe.

Infrastructure projects that lie along the corridors –the Fehmarnbelt fixed link is one – top of the list of those entitled to funding and the budget for these has been tripled by the European Parliament to £22bn for the 2014-2020. Under the TEN-T programme, a new seven-year funding period begins in 2014, during which Denmark will apply for more funds for the construction projects.


7am: Grontmij has said that “decisive steps” including further restructuring and refinancing will be taken this year to rescue its performance.

The firm said that European markets remained challenging, mainly in the Netherlands and France, and its improvement in profitability in 2013 had not matched its expectations. The firm made a net loss of €14.8M (£12.2M) on total revenue for the year to 31 December 2013 of £627M. This was down on the £649M the year before. An organic decline of 2.6% was mainly driven by France, where revenues declined by 10.4% and the Netherlands where they fell 5.4%.

A strategy to get the firm back in shape by 2016 includes additional restructuring measures, portfolio optimisation and a programme to accelerate improvements in the Netherlands. These next steps will be funded by the placing of £33M of new shares.

The restructuring programme is aimed at total annual cost reductions of £15M to be achieved by 2016 through a one-off cost of  £10.7M.

It will also review the strategy for the French engineering businesses and assess the strategic options for the French activities. Non-core assets in the Netherlands will be discontinued or sold.

The firm said it would continue to invest in the five long term attractive growth segments in which it has or can claim market leadership in its domestic markets or across-borders. These are water, energy, highways, sustainable buildings and light rail.


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