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Financing Scotland's Infrastructure

Scottish devolution has highlighted the importance of civil engineering to a country's economy. A strategically planned and well maintained infrastructure is seen as central to a country's economic potential - nobody will invest in a region with poor transport links.

The problem for Scotland is that there is a lack of political will to spend public money on new or upgraded transport links. Any increase in public spending is likely go on schools and hospitals before roads and water.

The issue for Scotland's civil engineers is therefore not how to build, maintain and manage Scotland's infrastructure but how to fund it.

Though the Scottish Parliament can vary income tax by up to three pence it is unlikely to do so. The solution for funding most improvements to Scotland's infrastructure is likely to be some form of public/private partnership.

The Scottish Office Construction Pathfinder group calls for the new Parliament to 'prioritise the creation of a framework for future Private Public Partnerships, thus swiftly engaging public and private sectors in developing creative solutions for the return of underused public assets to productive use' (News last week).

Babtie Infrastructure Consultancy managing director Alan Craig says: 'Right now there is no public sector expenditure because people have been reviewing and sorting out spending priorities. The only source at the moment is PFI.'

But the PFI has been a hot issue during the Scottish Parliament election campaign with many, particularly the Scottish National Party, arguing that it did not provide the public with the best value solution.

'I don't see the logic of these political arguments,' says Morrison chairman Sir Fraser Morrison. 'As long as the Scottish Parliament has an open mind about using the range of ways available to procure infrastructure then financing should not be a problem.'

This view is backed by Babtie PFI expert Bob Duff: 'PFI has changed dramatically in the three or four years since it started. It is now a mature market in Scotland that allows people to use a variety of methods. The reality is that PFI, as long as it is used in the right way, gives benefits to all.'

Glasgow Chamber of Commerce chief executive Peter Burdon would like to see more flexibility in the contracts.

'We would like to see the Scottish Parliament introduce more flexibility into the rules governing PFI contracts,' he says. 'It must be made easier and cheaper for companies to prepare bids to take over public assets. But if the Treasury is still defining the rules then there will be no difference.'

He adds: 'PFI is one strand of procurement. It is not a panacea. The new Parliament will help focus on the appropriateness of using PFI, thus ensuring value for money.'

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