Editor’s comment: “Navigating a parallel universe”

10 March 2016

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Infrastructure Intelligence editor, Denise Chevin, previews the March/April issue of the magazine and surveys a business and political landscape full of challenges.

"Businesses in our sector currently operate in parallel universes. In one, there’s the industry in overdrive, eyeing up a vast range of mega infrastructure projects stretching on to the horizon. It’s a dizzying prospect, driven in part by a swarm of City fund managers increasingly attracted to the ready income stream that assets such as waste-to-energy generation can deliver. We go “inside the mind of a fund manager” in our current magazine.

"Meanwhile, in a different, darker galaxy, alarming signs of implosion abound. Construction output is down and the brakes are tightening on London housebuilding. Slower economic growth means the Chancellor is poised for more spending cuts. And the Jeremiahs are out in force, predicting that we’re standing on the edge of global economic collapse.

"Navigating a path for the future has suddenly become very difficult. Government’s penchant for flicking the on-off switch when it comes to green energy generation is no help either – removing incentives for onshore wind, hydro, solar PV and the funding for carbon capture and storage. There is now a big question mark hanging over tidal power to add to the endless delays and disappointments over Hinkley. The Secretary of State for Energy & Climate Change, Amber Rudd, has ordered a review of tidal power that is not expected to report until the autumn.

"Yet despite a constant stream of reports warning the lights will go off in 2025, there is no evidence of haste being felt in drawing up a proper energy policy and framework for contractors and operators. Let’s hope the new report from the National Infrastructure Commission will inject a bit more urgency.

"And then of course there’s Brexit, or at least its prospect. A possible end to movement of labour, withdrawal of investments and the messy business of how we are to actually extricate ourselves are hugely worrying for the sector. Some leaders have voiced their concerns; many remain reticent lest they upset clients. The contents of the Chancellor’s red Budget box might bring UK spending a little sharper into focus – but unless there is a vote to ‘Remain’ in June, the anxieties will remain for many years to come. And it could be just the one universe that construction and engineering must navigate."

Download the March-April 2016 issue of Infrastructure Intelligence here.