Tuesday, June 28, 2011

Back in England... and the A14 is still a Menace

From the Cambridge News...

A14 lorry fire sparks series of explosions
Published: 28/06/2011 08:02 - Updated: 28/06/2011 17:01

Tuesday, June 14, 2011

CATCH 22 FOR THE A14

Business Leader John Bridge OBE is continuing to press the government to reconsider the decision to scrap the A14 improvement programme, claiming that its refusal to follow-through with the public inquiry is leaving the congested route in a Catch 22 situation.

The long-term campaigner for improvements to the A14 has renewed calls for Mike Penning MP, the Under-Secretary of State for Transport, to reinstate the process that he claims will result in a viable scheme being put on the table.

John Bridge OBE, Chief Executive of Cambridgeshire Chambers of Commerce, said:

Business Leader John Bridge OBE is continuing to press the government to reconsider the decision to scrap the A14 improvement programme, claiming that its refusal to follow-through with the public inquiry is leaving the congested route in a Catch 22 situation.

The long-term campaigner for improvements to the A14 has renewed calls for Mike Penning MP, the Under-Secretary of State for Transport, to reinstate the process that he claims will result in a viable scheme being put on the table.

John Bridge OBE, Chief Executive of Cambridgeshire Chambers of Commerce, said:

“The Minister has written once again and told us that the region needs the private sector to provide funding for any proposed scheme. However we have no scheme that a private sector organisation can consider for funding and he will not reinstate the public inquiry which will give us a tangible scheme.

“Here we have the Department for Transport once again confirming in writing that they believe ‘mobility’ along the A14 to be critical for economic success an growth. I think we’ve all come to terms with the government’s refusal to invest in this key section of our region’s infrastructure but what I can’t believe is that they are continuing to hamper growth by refusing to reinstate the public inquiry and therefore further delaying any sort of progress being made.

“Regrettably we don’t seem to be getting anywhere, except back to a talking shop where the government’s refusing to stock the shelves.

“The business community don’t care who pays for what, they just want action. They need to know that their staff are going to be at their desks on time, their deliveries are going to meet their contractual deadlines and that supplies can get through, when they need them. Right now, would a business consider locating in Cambridgeshire when gridlock on such a key through-route is making the traffic news on national radio on an almost daily basis?”

A recent survey of senior business decision-makers in the East showed that 75% of respondents agreeing that the key road network needs significant investment and improvement in the near future (1).

The Minister’s response to John Bridge’s letter of 7th February had to be re-sent after the letter the Department for Transport claimed to have sent on 1st March never arrived. Clearly the letter must, like many of us, have had to travel on the A14.

Saturday, June 11, 2011

Why the US is the greatest emerging market in infrastructure

This month we are supporting three events for the US PPP market. The first event – The InfraAmericas P3 Infrastructure Forum in New York  – was the venue for US legislators and public officials to meet with the private sector to evaluate the country’s progress into a mainstream market for Public Private Partnerships. TheCityUK was well represented by member firms looking to invest and bring expertise to help provide much needed infrastructure and public services.

Commentators noted that the US is still a small market in terms of deals closed, albeit one with very large projects, and that the progress is patchy across the country as different states have their own laws and political priorities. Last year saw five projects reach financial close with some 25 now in operation. By contrast, last year Canada had 21 projects completed and now has over 100 up and running.

The scale of opportunity
So why the interest, if so little has happened? It is a matter of size and future opportunities.

For example, California’s long-awaited Long Beach Courthouse was the first availability-based non-transport concession. California’s economy is the size of Brazil’s.

Colorado is the home of the Denver Fast Track project. Colorado’s GDP is greater than the United Arab Emirates.
Other states with transport PPPs were Florida, which is similar in economic strength to Turkey, and Texas, which matches the whole of Russia in the scale of its GDP.

The meeting heard from New York about the legal challenges facing the introduction of PPPs – New York’s GDP is about that of Mexico (a country called the silent ‘M’ in BRICS), while we heard speakers from Illinois (think of Indonesia), Indiana (Colombia), Georgia (South Africa) and Virginia (Saudi Arabia).

What is changing 
The public-policy environment is becoming more welcoming for PPPs. Surveys show Americans do not want their taxes to go up and are now more ready to see the private sector provide public services that had hitherto been state monopolies. Swing voters – ones who are neither exclusively Democratic nor Republican party backers – express support for a greater role for business in the provision of public services. Furthermore, the preferred way to get the USA out of its economic gloom is no longer through spending cuts, the path favoured in 2009, but job creation led by the private sector.

‘P3’, as the Americans call PPPs, are no longer totally synonymous with ‘Privatisation’. This is taking the edge off some of the political opposition to PPP projects, with the realisation that the ‘Public’ part of PPP means that the public sector sets the goals for the project and how it is to be operated.

Taken together, this makes PPPs less of a party issue and more of an ‘art of the possible’ one. And one that some 27 new state governors will want to try.

The P3 programme is helped by some visible successes. The Denver Fast Track project came in some 15 per cent under budget and 11 months early. The Indiana Toll Road has generated some 60,000 jobs in its highway corridor, matching the federal estimate that 30,000 jobs are created by every $1 billion spent on roads. The Long Beach Court House shows that it is possible to change the public sector’s attitude from one of providing a facility to that of providing a service.

While highways dominate the PPP debate, the move from simple toll road concessions to more complicated PPPs, including availability payment mechanisms, is underway. There are also many more concessions and outsourcing opportunities coming up in other sectors, notably rail, ports and water.

What remains the same
The USA is not a single market but one of 50 states with numerous territories and major conurbations to take into account. Some are progressing well – Virginia – while others – Texas – have slipped and are making up for lost ground and credibility. More, like Michigan, are starting on the path.

The states have no money. Maine and Pennsylvania were accused of turning asphalt into gravel as a result of their cost cutting.

There is still a liking for unsolicited bids. These are quite often used to force reluctant public officials into doing the groundwork for projects that should already have been commissioned. However, most panellists at the InfraAmericas event thought them to be a distraction.

What to look out for
Two jurisdictions were praised for setting up PPP units, the territory of Puerto Rico and the state of Virginia. A third, the city of Miami, spoke of the positive benefits of hiring a specialist in PPPs.

Virginia has set itself the target to be the model authority for the rest of the country. Virginia is now identifying a transport project pipeline and working on professional project development practices, for example ensuring that the business case and value-for-money assessments are done before going to market. For more, visit the Virginia.gov website or attend TheCityUK’s supported “Winning Bids in the USA” conference .

The Texans showed up in force with an apology for the moratorium on PPPs and a new challenge, “Come and beat Cintra,” as they see too much Spanish influence on their road network.
Rail is on the agenda; both light rail for cities and the much-discussed Obama plan for High Speed links.

Conclusion
The InfraAmericas event brought 400 people to New York to discuss five deals from last year and potentially many, many hundreds in the future.

The USA is still an emerging market for PPPs, with huge potential for TheCityUK’s members. The next two events we have on this are:
All day, 23rd June – ‘Winning Bids in the USA’, a conference with Partnerships Bulletin.
1pm, 28th June – A round table with New York’s UKTI official responsible for PPP promotion.

Wednesday, June 8, 2011

Off to America

Will be talking infrastructure, finance and projects for a few days in New York... and Thomas the Tank Engine, "do you need a change?" and "time to play in the garden," in Pennsylvania.

Thursday, June 2, 2011

New University Chancellor... Who?

Well, three candidates so far...

Lord Sainsbury, a Labour apparatchik with the charisma (and the contents) of an ATM machine; Brain Blessed, a very loud voice for students; and
A local trader, who may live here but does not like competition (especially from a family firm associated with the first candidate).