How come there are no potholes in The Netherlands?

No-one who has ever been there, would deny The Netherlands has extremely good infrastructure.

It has more bridges, more railway, more motorway and more functional waterways per square kilometre than any other country in the world. And that’s before you get to the tunnels, bicycle tracks, causeways and, well, you name it.

What’s more – they all work, pretty much all of the time.

The Netherlands consistently comes out top when it comes to scoring for infrastructure and is number one as the world’s most attractive country for infra-vestment in the empirical Infrastructure Index published by global law firm CMS.

Indeed it is so famous for its fabulous infrastructure that the headline above was a genuine question sent into a cycling blog (BicycleDutch) from an American user in 2014. It pretty much sums up the picture.

Great questions

The great questions then are; why are the Dutch so good at infrastructure and what can we learn from them?

The following was read in September 2016 to the Netherlands Parliament by the then Minister of Infrastructure Schultz Van Haegen.

“From now on the Infrastructure Fund will be automatically extended every year. This means funding for roads, railways, regional transport, waterways and the management and maintenance of Dutch infrastructure is safeguarded for years to come.”

It demonstrates very neatly that infrastructure planning and funding is engrained in the very heart of Dutch political and social thinking.

It could easily be argued that this is not just classic Dutch pragmatism but a necessary thread of constant thought for a country of which one-third is below sea level.

Funding ratchet

At the same time, Mr Van Haegen announced the same funding ratchet be said of the new Delta Fund – which was launched for the sole purpose of investing in flood risk and water management. Between the two, the Dutch government set aside EUR6.8bn in 2017.

The Dutch are so proud of the structure of their infrastructure investment they even advertise it.

https://investinholland.com/infrastructure/

So why are they so good at it?

Wim Blaasse, managing partner of Dutch infrastructure fund manager DIF, told the CMS Infrastructure report last year, “The Dutch procurement process is widely applauded for being transparent and efficient, with milestones broadly reached on time.

“The Ministry of Infrastructure (Rijkswaterstaat) has overseen the country’s infrastructure development since 1798 and has built a strong reputation for high standards among infrastructure investors.”

By way of contrast, the UK’s National Infrastructure Commission – which exists to advise government on infrastructure needs – was founded in 2015 and became an executive agency of the government in January 2017.

The Dutch meanwhile, achieve their status in 2017, despite having had no functional elected government for more than 200 days in 2016.

In neighbouring Germany, third on the CMS list of attractive investment destinations behind Canada, the picture in the last couple of years has been very different.

Huge backlog

Only in August this year following the tragic bridge collapse in Genoa, Italy, there was a bout of distinctly un-Germanic introspection and harsh self-criticism over a huge backlog in infrastructure funding.

Hard infrastructure, such as road and railways have for decades been getting insufficient funding and many school and public building are in desperate need of updating, German economists warned.

Henrik Scheller, a researcher at DIFU (The German Institute for Urbanism) told German business website DW: “The estimated backlog of public investments in hard infrastructure as of 2015 was about 136 billion euros worth ($162 billion), and in 2016 it was still 126 billion euros. These are estimates of the cost of upgrades to basic hard infrastructure required by existing laws — for example, investments in bridge maintenance, road improvements, or properly built schools and kindergartens.”

So back to Holland. The infrastructure of the Netherlands is also an intensely competitive market, with more than 200 pension funds including the so-called ‘big five’ vying to fund the big projects which have been earmarked by government.

Dutch pragmatism

Is it just this, though, or is that legendary pragmatism a big part of their secret to success.

Jacob Dreyer, an infrastructure project pilot for global Infrastructure exchange EIX, based in the Netherlands, says the funding and maintenance of infrastructure is at the forefront of every Dutch mind.

“A very big reason why the Dutch are so good at infrastructure is because we have to be.

“For example, the Western side of The Netherlands is a completely artificial landscape. It’s reclaimed land and largely a man-made structure. Frankly, if we weren’t good at infrastructure, half the country would be under water. It certainly helps to focus the mind.”

“Good finance is what makes it tick,” says Dreyer, “The Dutch pension funds like APG or ABP are typically switched on when it comes to investments of this nature and they work very closely with government.

“They provide the money and the government takes the risk out.”

As for the ongoing maintenance of Dutch roads, he said:

“I lived in London for 10 years, south-west London, and I was constantly baffled by all the potholes around. What is the point of not fixing them?”