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Why British civils firms must aspire to excellence to compete on the world stage

Chancellor George Osborne’s announcement, during his charm offensive in China last week, that Chinese investors are to help fund construction of Britain’s first new nuclear power station in a generation, is a huge boost to the UK’s energy sector.

Days before, energy minister Ed Davey predicted that a “massive” wave of investment from China, Japan and Korea would secure UK’s power supply into the future.

Qatar recently announced its intention to invest £10bn in British infrastructure projects too, confirming the popularity of UK schemes among deep-pocketed foreign investors.

But while it is encouraging that money is flowing into the sector again, the British civils industry is having a “burning platform” moment. Faced with fast-growing competitors overseas and a debate at home about how projects are paid for, it must act or die. 

The UK infrastructure sector has great strengths, but it needs to overhaul many of its practices. From our political leaders to the investors, and down the supply chain, British infrastructure must become more integrated and more collaborative.

Of course our politicians have a crucial role to play in this. Major, long-term infrastructure programmes should not be allowed to become political footballs – so a dedicated infrastructure board made up of government and industry leaders should be created to oversee all transactions and planning.

We as an industry must also embrace both technology and visionary thinking. Brunel did not achieve the feats he did without pushing Victorian technology to the limit, and today’s infrastructure leaders and developers should take calculated risks in order to drive further innovation.

Investing in the best research and technology is essential to ensure British infrastructure stays competitive. Advances in technology should also reduce the environmental impact of what we do – which as well as being a worthwhile goal in its own right, will help us retain the support of the government and the public.

We must change the relationship between client and contractor – and reward according to value, not just baseline cost. This is already beginning to happen through the adoption of supplier performance models – such as the ‘One Alliance’ model originally developed eight years ago by Anglian Water with Turner & Townsend.

The intelligent use of data will in future allow procurement to focus on productivity rather than just price. But long-term, the goal must be to reward the supply chain for its ability to outperform. Incentivised by their financial stake in projects, contractors will adopt the values of ownership.

Finally there is the issue of attitude. British infrastructure achieved great things for the Olympics partly because the eyes of the world were on it, and it had a rigid deadline to meet. But a “can do” spirit played a big part in the success too. If that spirit can be maintained, it will be arguably the Games’ greatest legacy.

The challenges facing UK infrastructure are great. The days of the government writing blank cheques for strategic projects are long gone, and funding models are becoming increasingly complex.

But with foreign money beginning to flow into British infrastructure projects, it is up to the industry to seize this opportunity to reshape itself. Failure to change will soon turn into a failure to compete. For such a totemic industry, that should be unthinkable.

 

Murray Rowden is infrastructure managing director at Turner & Townsend

 

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