Main risks and uncertainties

LEGAL DISPUTES

• Deurne waste water treatment plant - collapse of dividing wall

In September 2012, a dividing wall between two basins collapsed at our waste water treatment plant in Deurne. Besides major property damage, the collapse also resulted in additional operating costs (sludge treatment, extra chemicals, etc.).

Aquafin took the initiative of requesting the involvement of a court-appointed expert. In his final report in the spring of 2016, the expert assigned the liability. Aquafin was also assigned partial liability (inadequate design guidelines and working with too high a water level during operation). The damage was estimated at around 2.7 million euros.

Aquafin disputed its liability and brought an action in 2016 requesting the court to pronounce a different liability regime. In 2018, Aquafin’s insurer indemnified the company for the loss covered by the policy, amounting to approximately 2.1 million euros.

In 2019, the court issued a judgment further reducing Aquafin’s liability. No appeal was lodged against this judgment. In the meantime, the parties have reached a mutually agreed settlement and part of the remaining amount - not covered by the insurance - has already been paid to Aquafin. With the assistance of our insurer, Aquafin has been able to close this case with no financial disadvantage. INSURANCE CLAIMS

• Waste water treatment plant Deurne - insufficient concrete reinforcement

At the water treatment plant in Deurne, it was discovered in 2007 that, due to a design error, the walls of certain aeration basins were insufficiently reinforced. This loss is partially covered by Aquafin’s CAR (Contractors’ All Risks) insurance policy and partially by the professional indemnity insurance policy of the engineering company concerned. Both insurers actually paid out.

The amount that was not covered by the CAR insurer was recouped in 2011, partly from the engineering company that made the design error and partly from the inspection body operating on the site. In 2013 a substantial part of the remaining amount was recouped from the engineering company and its insurer. The inspection body and its insurer stated that they were prepared to provide compensation for part of the remaining loss, with no admission of liability. So far, Aquafin has not accepted this offer, since this payment is conditional on Aquafin waiving all other claims against the inspection body on this site. In view of the aforementioned legal action concerning the collapse of the dividing wall, Aquafin was not prepared to do so. Following the judgment issued in the above case, absolving the body of all liability, Aquafin will claim the amount offered from the inspection body after all. Aquafin will ultimately be left at a very slight financial disadvantage.

DELIVERIES

In 2019, Aquafin delivered 80 supra-municipal investment projects with a total contract value of 137.6 million euros and a total project value of 161 million euros. Due to a number of administrative reasons, delivery of 12 projects was postponed, for a contract value of 14.1 million euros and a total project value of 16.9 million euros. The reasons are administrative in nature or the return on the project is too small as yet because of a delay in the connection of (municipal) projects. These projects are complete and ready. The administrative file will be prepared for delivery once more in 2020.