Cost consultant Turner & Townsend has said that infrastructure will be the most resilient sector in the UK over the next two years.
“Whatever government is elected this year it has got to continue to invest in infrastructure,” said chief executive Vince Clancy.
“There will be some reduction but infrastructure is a long term investment and it is vital for the long term success of the economy,” he said.
Clancy was speaking as Turner & Townsend this week reported net revenue of £96.9M in the six months to October 2009, down from £105.6M the previous year, but profit before tax maintained at £10.2M.
“There will be some reduction but infrastructure is a long term investment and it is vital for the long term success of the economy.”
Vince Clancy, Turner & Townsend
The UK will remain tough for the next two years, Clancy said, as public spending is cut back. “But we have already seen big reductions in central government spending so I am not as pessimistic as some.”
The company has made only 90 redundancies and a deal with UK staff to switch to a four day week has not yet been enacted although the option has a year to run.
Market conditions globally remained challenging but there were signs of recovery around the world, Clancy said, particularly in Africa, Asia, the Americas and Australia.
“Infrastructure investment presents significant project prospects across all of our regions, and we are continuing to see good opportunities in our energy and mining businesses, where markets are still strong,” the company said.
Meanwhile the company is relocating two of its UK directors to Canada and Africa in response to the anticipated rise in the international infrastructure market expected over the next two years as governments take more innovative approaches to raising investment for projects through the use of PPP.
Rise in international infrastructure
Dominic Leadsom, who moves to Toronto, Canada, has worked in the UK PPP environment advising lenders, bidders and government institutions for the past ten years. He has been involved in the Canadian PPP (P3) market for the past two years. His role in Toronto will be to develop Turner & Townsend’s new PPP advisory business as the Canadian Government’s ‘Building Canada’ initiative commits to using PPP to meet future infrastructure demand.
Canada already hosts the world’s largest infrastructure investors and is forecast to be the strongest greenfield PPP market over the next 12 months
Mark Walmsley, who is transferring to Johannesburg, South Africa will help the company to increase its already established profile in the PPP market in South Africa and further develop its presence in the growing African market.
South Africa, alongside other African countries, is using PPP to raise the private investment required to help fund large infrastructure projects and improve the delivery of public services, with the South African Government recently committing R787bn (£65bn) to renewing its infrastructure.