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Scots survival

The vast Scottish dam impounding dozens of lucrative water schemes is at last about to burst - to the delight of the engineers.

And the pounds1bn worth of sewerage and water projects it will start releasing next year is seen as providing the survival kit for Scotland's otherwise flagging construction industry.

The overall market, which last year bucked the still upward UK trend by taking a surprise 10% downturn, is currently mill pond flat. And were it not for the that water deluge, next year's forecast would be equally gloomy, with virtually no growth in most other sectors.

First through the dam breach will be a rush of privately financed sewerage projects. But with most of this pounds600M batch of urban wastewater clean up schemes already at preferred bidder stage, contractors not yet aboard could soon be facing a rough ride through the market place.

'Water is definitely Scottish construction's saving grace but, when this initial surge dies down, I am most concerned there will be nothing from other sectors to replace it,' says Alan Watt, chief executive of Scotland's Civil Engineering Contractors Association. 'The fall then could be dramatic.'

Though stalled for ages on the starting line, the country's three public water authorities are at long last packaging up suitable PFI sewerage projects. The pounds45M Inverness and Fort William scheme is already on site and five others, totalling over pounds300M, have preferred bidders pencilled in to break turf by next spring (see NCE's water special next week).

Contractors now have little time to meet the European Union December 2001 deadline for all these urban wastewater schemes. But the PFI route already seems shortlived and water engineers predict few such schemes will follow those already earmarked.

There remain countless more EU ordered sewage clean-up projects that must meet either the 2001 date or the later 2005 deadline for upgrading smaller plants. But all three water authorities say these are of insufficient size or geographical grouping to warrant the expensive tendering and complimentary high return benefits that make PFI attractive.

And they claim there will be sufficient in-house funds to finance these schemes themselves.

But what will happen when the water sector's roughly pounds400M predicted annual spend starts to dry up in less than five years? Scotland's wider market is peppered with uncertainties.

The much trailed boost in rail spend - currently some pounds130M a year - is seen by many as patchy, less secure and not so free flowing as predicted.

Roads are long dead - or at least the widely held industry perception would have them so. The pounds800M list of over 20 major schemes now lies crumpled on a Scottish Office floor. But engineers may be surprised to learn that Scottish Office director of Roads Jim Innes has yet to push the list through the shredder.

The doomed fate of the equivalent list south the border is already a reality. But the Government is only this month starting the Scottish roads review following the country's own separate consultation process.

The basic criteria against which each scheme must be judged is similar to England's, but special needs - such as remote communities and less practical public transport alternatives - are likely to favourably weight the analysis equation.

Innes is 'hopeful' most of his schemes will pass the test and prove justifiable. But - given that future PFI funding is firmly off the agenda as not likely to deliver 'best value' - the Innes confidence does not extend to much, if any, public funds being available, at least in the short term.

Uncertainties also surround government's much flaunted integrated transport initiative. Contractors see opportunities in park and ride facilities, guided busways, even the odd rail line reopening. But they regard these as 'piecemeal and distant' rather than 'big and now'.

And what of the largest uncertainty of all - devolution ? Next May's arrival in Edinburgh of hoards of eager, inexperienced politicians could fill a site agent's diary with a catalogue of unknowns.

Heading the list is the possibility of an over bureaucratic parliament, hung between Labour and the Scottish Nationals. Allegedly construction- friendly Labour could be seen bear-baiting across the chamber with the SNP - a grouping against many things private, especially PFI, and in favour of 'redemocratising' water by perhaps returning it to local authority control.

Even without such infighting, there is the virtual certainty of a hiccough in construction cash flow as the newly elected representatives debate what to do and how to do it. Witness, say engineers, the long lasting project blight that followed 1996 local government reorganisation.

One certainty is that Scotland's future market will continue to be fought over mainly by Scottish companies. The country's contractors would deny parochialism or any hint of a tartan curtain hanging just north of Hadrian's Wall.

Many south of the wall regard the pounds1bn/y market as not worth the candle, given the preponderance of indigenous contractors offering the genuine local presence Scottish clients seem to prefer. As a leading English based contractor put it: 'When I venture north in search of work I make sure I take an engineer with the right Scottish accent along with me.'

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