Better transport infrastructure boosts trade and prosperity

Transcript of speech given at fifth Annual International Infrastructure Investment and Construction Forum (IICF) on the benefits of better transport infrastructure.

This was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government

Stephen Hammond

I am delighted to take part in the 5th Annual International Infrastructure Investment and Construction Forum.

We are here because we all recognise the benefits of a better transport infrastructure in our countries. Improved capacity and better connectivity between cities and nations boosts trade, and creates growth and prosperity.

Back home in London, my Government has placed improvements in transport infrastructure at the heart of our reform agenda.

The UK Government has secured more than £70 billion of capital investment for transport across the next Parliament. Much of this activity is set out in our National Infrastructure Plan, which details the major UK investment opportunities for the rest of the decade.

We are developing the biggest rail modernisation programme for generations by building Crossrail and HS2 (our flag ship high speed rail network), liberating space on existing networks and providing the capacity to help the UK grow and prosper.

Britain is open for business and London, in particular, remains the preeminent base for international maritime business services.

My country welcomes inward foreign investment into our major infrastructure projects, including rail, ports and airports - through fair, open, transparent, competition processes.

But we are not unique in the UK. I know that every country in the world, and I am sure every person in this room, wants to see the benefit that improved infrastructure can provide their local community and wider economy.

That’s particularly true for developing countries in regions like Africa, Asia and Latin America.

World Bank research has shown that infrastructure development have contributed more to rising wealth worldwide than other structural growth policies.

So today I want to talk about how specialist infrastructure companies can help build better transport networks and improve efficiency.

To give you an example, Africa spends on average $40 to $45 billion on infrastructure each year…

However, a World Bank study estimated scope for $15 to $20 billion of efficiency improvements in this area.

UK firms have the expertise to help deliver these benefits.

We’re encouraging UK and Chinese infrastructure firms to forge closer links to identify opportunities for collaboration.

That means working together to provide a wide range of services, including project design, financing, procurement, management and construction, to provide emerging countries with a high-quality, enduring infrastructure to support long term economic development.

UK companies have a strong track record in delivering successful infrastructure projects around the world.

They’re experienced in Public-Private Partnerships - an increasingly popular model for infrastructure financing in emerging countries.

And they’re familiar with initiatives like the New Engineering Contract - a legal framework which has demonstrated over two decades a proven record in delivering major projects safely, on time, on budget and with zero litigation.

This know-how and experience complements those of Chinese constructors, which have been working on infrastructure projects in rapidly developing countries for more than thirty years.

Together we know just what it takes - with China’s far-reaching presence and longstanding expertise in construction and the UK’s expertise in infrastructure investment, to achieve better outcomes in building large scale projects on the continent.

That’s why the UK government is committed to supporting further collaboration between UK and Chinese firms.

Together, we can meet the infrastructure needs of other countries – and strengthen this partnership and provide a competitive service.

An example of this is the Lamu Port, oil pipeline and transport corridor that has the potential to improve transport links between Kenya, Ethiopia, South Sudan and indeed other countries in the region.

We’ve made real progress in recent years.

At the 2010 UK-China Summit, we vowed to collaborate more closely in developing markets.

And in September 2011, we signed a further Memorandum of Understanding to work together on infrastructure projects.

During the British Prime Minister’s visit to Beijing last, he took part in an innovative collaboration forum involving UK and Chinese firms in African markets.

Our own Institute of Civil Engineers has signed a Memorandum of Understanding with the China International Contractors Association to boost sector ties between the UK and China.

And the UK government is working with the China Development Bank on economic development goals in Africa.

As a result of all of this progress, a number of major collaborations are already under way.

I am delighted that Beijing Construction Engineering Group has joined Carillion PLC and the Greater Manchester Pension Fund as funding partners in an £800 million Joint Venture project to build Manchester ‘Airport City’

This is the largest UK development project since the London 2012 Olympic Games.

Airport City will provide over 5 million square feet of business space and create more than 16,000 jobs.

International aviation is essential for increasing the connectivity of our economies and supporting international prosperity. It is a key engine for growth.

To facilitate greater connectivity, our airlines are eager to increase the number and types of air services that can operate between the UK and China, and the range of different cities that can be served

I believe that the more liberal our international air service agreements are, the lower the costs and the greater the choice for consumers and businesses alike

That is why I am delighted that talks on air services are being held by UK and Chinese aeronautical authorities in Beijing in July.

In Africa, a Chinese construction firm joint venture has started work on site building a new passenger terminal at Kenya’s Jomo Kenyatta International Airport.

The terminal, which will be Africa’s largest, was designed by UK architects Pascall+Watson.

When complete it will eventually be capable of handling 20 million passengers a year, helping increase Nairobi’s competitiveness as a transport hub.

And in Ghana, Lonrho has issued a letter of intent to China Harbour Engineering Company to be their construction partner on the Atuabo Freeport project.

This facility could greatly support West Africa’s growing oil and gas industry.

British companies are also achieving great commercial success in Singapore’s rail sector, as the country takes forward ambitious plans to double its Mass Rapid Transit network to 360 kilometres by 2030.

Other key transport infrastructure projects in Asia such as the planned high speed rail link between Singapore and Malaysia also present major opportunities for UK firms to share their world class expertise in this area.

In Equador, the British firm Mott MacDonald was the key adviser for its new international airport at Quito.

Mott were able to share their expertise on environmental disciplines including noise reduction, water treatment, flora/fauna protection and impacts on the local community.

On completion, Quito Airport was awarded a United Nations Global Sustainability Award and is an outstanding example of British companies’ commitment to green construction and technologies.

I understand that sustainable airport construction is of increasing interest in China and that there is a lot that we can share for our mutual benefit.

As we look to the future, I very much hope that there will be increasing opportunities for UK firms to work with colleagues in China on joint projects in Africa, Asia and Latin America.

We can provide expertise in areas such as design, project management, feasibility studies and financing – contributing to a transparent and efficient procurement strategy, and the development of world class infrastructure.

So my message today is simple: together, we are stronger and more prosperous.

And I look forward to celebrating new collaborations and ventures in the future, which will not only benefit China and the UK, but that will also support growing prosperity in emerging markets around the globe.

Published 15 May 2014