28. Contingent assets and liabilities


Contamination by extinguishing foam

In July 2008, the Rijnland District Water Control Board collected PFOS contaminated extinguishing foam, released during an incident at a KLM hangar in Schiphol-Southeast and stored it in reservoirs made available by Schiphol. The Water Board had been granted a permit for this by the province of North-Holland. Although the contaminated foam was removed and decontaminated in 2009, it was later discovered that the soil and groundwater around the reservoirs had also been contaminated. As the owner of the land concerned, Schiphol suffered damage as a result. The Water Board removed the sludge from the reservoirs in 2011 to prevent it from causing any further contamination. Monitoring confirmed that the screen was effective. In 2015 it was concluded that a final solution had not yet been realised due to the lack of a standardisation and remediation technique. KLM, Schiphol and Rijnland took control measures around the reservoirs aimed at preventing the further spread of PFOS. The control measures are related to the construction of a bentonite wall around the contaminated area. Since the wall is watertight, rain and seepage have to be drained off. This required the construction of a filter installation in order to be able to pump, filter and transport the water out of the soil into an adjacent ditch.

KLM, Schiphol and Rijnland each financed a third of the costs of the control measures taken without any party acknowledging its responsibility for the damage incurred. The watercourses at Schiphol that were contaminated during this incident have been cleaned up within the framework of the regular dredging programme. The additional costs incurred on top of the regular dredging programme for the transport and processing of the contaminated material have been charged to KLM. Evides, a water decontamination company, is taking measures in consultation with the municipality of Haarlemmermeer to deal with the technical facilities, soil and groundwater that were also contaminated during the incident. Evides contacted Schiphol and KLM to discuss further action to manage the contamination. Consultations with the competent authorities were started at the end of 2013 with the aim to check the plan against laws and regulations. Evides, KLM and Schiphol took measures in 2014/15 to protect the quality of the surface water in the ditch next to the waste water purification plant. Based on an RIVM report the province of North-Holland set new guidelines with regard to PFOS in 2017, which did not necessitate any adjustments to the current measures taken at the former basins. The new reuse policy that the municipality of Haarlemmermeer drafted in October 2017 does not influence the current situation either. KLM, Schiphol and Rijnland have agreed to postpone discussions on a financial settlement until remediation techniques for the cleaning of contaminated soil become available. As a result it is currently not possible to determine an reliable estimate of the expected costs.

Covenant on local environmental quality in the medium term

The covenant includes arrangements on how to improve the quality of the local Schiphol environment in the medium term. For this purpose, Schiphol and the province of North-Holland incorporated the Stichting Leefomgeving Schiphol, a foundation with an independent board that is in charge of a programme for area-specific projects (improvement of the quality of the local environment in specific areas) and individual measures (mitigation in individual cases of noise-related distress). The financing parties are the province of North-Holland, the Ministry of Infrastructure and Water Management and Schiphol Group. Schiphol provided 10 million euros for the first tranche in 2006. A second tranche was committed in the Alders recommendations of October 2013 in connection with which Schiphol Group is again making 10 million euros available. Schiphol Group’s contribution in the second tranche will again focus primarily on the most distressing cases.

Reduction of ground noise

The parties to the Alders Platform agreed to reduce ground noise levels by 10 dB. A reduction of 7 dB has been realised thus far by installing sound-absorption ribs. Schiphol is in consultation with the municipality of Haarlemmermeer and the residents delegation Vrijschot Noord about measures to be considered for realising the remaining reduction of 3 dB.

Schiphol Area Development Company N.V. (SADC)

Schiphol Group participates directly, and indirectly through the collaborative venture Schiphol Area Development Company N.V. (SADC), in land holdings in the vicinity of Amsterdam Airport Schiphol. SADC's objective is to develop business locations and supporting infrastructure projects around the airport. One of these land holdings concerns the A4 Zone West area. Schiphol Group has a future obligation to contribute 19.2 million euros as a limited partner's contribution, to be increased by financing and acquisition costs, to fund the contribution of land to GEM A4 Zone West C.V. by the municipality of Haarlemmermeer.

Soil contamination

PFOS contamination of the soil was detected during excavations in the context of development projects at Amsterdam Airport Schiphol. Since 2017 local legislation is in place that requires Schiphol to clean PFOS contaminated soil. Schiphol has recognised a provision for the decontamination of the land on which construction work will take place in the near future. No provision is recorded for potential PFOS contamination under existing assets.

Settlement of airport charges

The activities of the Aviation business area (at Amsterdam Airport Schiphol) are regulated. Under the Aviation Act, Schiphol Group must settle surpluses and deficits from specified income and expenses with the airlines. In accordance with the accounting policies, surpluses and deficits eligible for settlement in the airport charge rates are not presented as assets and liabilities in the balance sheet. For further information, reference is made to note 1. Revenue.

Commitments arising from long-term contracts

(in thousands of euros)

Total 2018

< 1 year

> 1 year and < 5 years

> 5 years

Commitments relating to:

Security, maintenance and cleaning

671,988

310,644

348,917

12,427

Development of Schiphol (incl. Capital Programme)

493,609

137,743

344,755

11,111

Development of Lelystad Aiport

15,704

9,371

-

6,333

Electricity and gas

25,811

8,959

16,852

-

Rents and leases (operating lease)

1,356

425

931

-

Other capital projects

11,617

9,367

2,250

-

Total

1,220,085

476,509

713,705

29,871

(in thousands of euros)

Total 2017

< 1 year

> 1 year and < 5 years

> 5 years

Commitments relating to:

Security, maintenance and cleaning

690,611

225,884

365,059

99,668

Development of Schiphol (incl. Capital Programme)

262,561

82,307

159,296

20,958

Development of Lelystad Aiport

35,243

28,734

176

6,333

Electricity and gas

6,305

6,305

-

-

Rents and leases (operating lease)

6,783

5,262

1,521

-

Other capital projects

595

595

-

-

Total

1,002,098

349,087

526,052

126,959

Multi-purpose building at Eindhoven Airport

On 27 May 2017, a portion of a parking garage under construction at Eindhoven Airport collapsed, resulting in infrastructural and financial damage and delays in other construction projects. In December 2017 BAM and Eindhoven Airport reached an agreement about the demolition and new construction of the garage. BAM is in charge of this project. In January 2018 BAM started the demolition phase; new construction started in April 2018, with delivery scheduled to take place in October 2019. In December 2018 BAM and Eindhoven Airport reached an agreement on the financial settlement of the incident which settlement was recognized in the financial statements of 2018.

In October 2018 the Dutch Safety Board published the conclusions from its investigation into the technical cause of the collapse, which was found to be a construction error. Eindhoven Airport takes due note of the content of the report in order to contribute to the prevention of such incidents in the future.

Long-term partnership between Dutch construction firms and Schiphol Group

In 2017 Schiphol launched a European tendering procedure to select a group of partners for the maintenance of and investing in existing infrastructure at the airport. The total estimated value of the assignment is 2.5 to 3.5 billion euros over a period of no more than nine years. The firms Schiphol Group selected in August 2018 for the finalisation phase of the tendering process were BAM, Heijmans and VolkerWessels. As per 31 December 2018 no commitments were included yet as the contracts were signed in January 2019.

Other contingent assets and liabilities

A bank guarantee amounting to 2.3 million euros relating to payment commitments in connection with the ‘Storage in Underground Tanks’ order has been granted to the province of North-Holland.

Various other claims against Royal Schiphol Group N.V. and/or its subsidiaries have been filed, and there are disputes which are yet to be settled. All claims and disputes are being contested and the company has taken legal advice on them. However, as it is impossible to predict the outcomes with any certainty, it is not yet clear whether any of the cases will result in actual liabilities for the company and/or its group companies. Accordingly, no provisions have been recognised in the balance sheet in respect of these claims and disputes.

The company has also brought claims against third parties and has disputes pending in which it is the claimant. Since it is not yet clear whether these cases will be resolved in the company’s favour, no related receivables have been recognised in the balance sheet. The aforementioned claims have arisen in connection with large construction projects.

Next:

29. Management of financial risks and financial instruments