Infrastructure spending is key to City success

 
Michael Bear
AS a civil engineer by trade, I have seen first hand how improving and modernising infrastructure can be a powerful engine for economic growth and social change.

Working on the demand side of our business has shown me the intimate connection between building South African airports or redeveloping Spitalfields market, and supporting a successful financial services industry.

Regeneration and reconstruction can transform communities and cities. And we must remember that infrastructure pays for itself. One pound spent on construction brings £2.84 back into the economy – 92 per cent of which is spent in the UK.

But such projects must first be designed, financed, insured, built and maintained.

The City is a world leader when it comes to mobilising the capital needed for such large-scale development. In the last 15 years we have invested to an unprecedented degree in our infrastructure, although it will be a perennial challenge.

A significant proportion of investment over the past 15 years has been funded via public-private partnerships (PPPs), which have been responsible for around 25 per cent of UK public infrastructure spending.

This means the UK – and the City in particular – is a world leader in how to plan, procure, manage and deliver PPP projects from roads to hospitals, prisons to street lighting.

Fresh from leading City business delegations to Turkey and the Gulf, it is clear that these rapidly growing markets are taking major strides towards becoming global financial hubs of the future.

These countries recognise that delivering top quality infrastructure is vital to attract leading institutions and individuals in a competitive global market.

And they are not the only ones – India has been spending about six per cent of GDP on infrastructure over the medium term, while China has been spending close to eight per cent.

But in many cases rapid economic growth continues to outstrip infrastructure supply.

Addressing this potential bottleneck is vital to ensuring long-term prosperity and so plans such as Abu Dhabi’s “2030 Vision” or Saudi Arabia’s new economic cities are crucial.

The opportunities these programmes offer to British companies is astonishing. We must think outside the box and reassert our reputation as collectors of best practice.

It is a good sign therefore that three British architectural firms — Atkins, Arup and Pascall & Watson — are involved with SBG for the first phase of Jeddah airport’s reconstruction in Saudi Arabia.

This huge contract involves a new terminal building, parking facilities, an airport hotel and a control tower, to be completed within 22 months.

British companies working in partnership to deliver world-class infrastructure – a model for future development in markets far and wide.

Michael Bear is Lord Mayor of the City of London