NEWS / Blog / Infrastructure planning needs more independence

Swansea Bay Tidal Lagoon.

19 JUL 2018


Recent decisions on Heathrow and Swansea Bay highlight the need for a reappraisal of how infrastructure is commissioned


he decision to expand Heathrow is good news for our industry. The £14bn project will mean a new runway for Europe’s busiest international airport and new passenger facilities. There will be new rail spurs to the south and west and extensive work on tunnelling the M25.

On a wider level, Heathrow will generate 180,000 jobs, including 5,000 apprenticeships, and up to £187bn in economic benefits across the UK by 2050. Passengers will be able to fly to more destinations and London will be better connected to the world. This will increase in-bound tourism and reinforce London’s position centre for business and finance - crucial for continued economic success in a post-Brexit world.

On the very same day the Commons voted on Heathrow, the government quashed plans for the £1.3bn Swansea Bay tidal lagoon project which sought to harness the power of tides and turn it into electricity. The project had the backing of the Welsh Assembly and local MPs and was expected to generate enough energy for 155,000 homes, as well as 1,000 jobs and ongoing opportunities for the tourism and leisure sectors.

The government made the decisions on cost grounds, arguing the electricity generated wouldn’t compare favourably to other sources, notably a mix of wind and nuclear. However, critics of the decision claim the longer lifetime of the lagoon, with electricity potentially generated for 120 years, wasn’t considered.

While meaningful engagement with stakeholders is an integral part of good infrastructure delivery, Heathrow’s expansion has been nearly 30 years in the making and bulldozers are only expected to start work in 2021. In that time, we’ve seen the continental hub airports invest in new runways (Amsterdam now has six, Paris and Frankfurt four). It may already be too late for Heathrow to maintain its position as Europe’s number one international airport in the longer-term.

Contrast the Swansea project, which has been discussed and now delayed - perhaps indefinitely - to the, admittedly less ambitious, Normandie Hydro project across the Channel. With the full backing of the French government, EDF Energy will soon have seven turbines testing the viability of the technology and providing power to 13,000 homes by 2020. Other tidal projects in Russia, South Korea and Canada are progressing. We may have already lost the initiative to foreign competitors.

These decisions reveal issues with the concentration of political power and finance in the UK. Infrastructure should be apolitical and rise above party bickering and horse-trading. Would the tidal bay project have gone ahead with a Conservative government in Wales? We may never know. Should the devolved nations have more input in this area? Yes. Should the National Infrastructure Commission be given more power to influence long-term planning? Most definitely. 

Should we be identifying larger projects which are “apolitical” to help speed the process up? Again, yes. For example, London’s transport network simply cannot afford a 30-year delay on Crossrail 2, which would also mean losing the expertise and knowledge gained during the construction of Crossrail.

Money is another area for concern. While Heathrow is expected to be funded from private sources, too much political uncertainty will ultimately mean more expensive finance. Furthermore, how will we fare post-Brexit when we potentially no longer have access to the European Investment Bank as a source of investment? In the current Brexit debates, the issue has been largely pushed aside, but it is one that needs to be discussed sooner rather than later.

I believe that the long-term solution lies in the creation of an equivalent to Germany’s KFW bank to independently make infrastructure investment decisions, working in close partnership with a beefed-up National Infrastructure Commission. Along with a greater say for regional authorities and the devolved nations, we could see the emergence of more clarity when it comes to long-term infrastructure planning and projects which truly address structural needs across the country. 

In the absence of any such system, we run the risk of projects in the national pipeline drifting until the political and economic climate is right. With so much uncertainty in today’s politics, we can simply no longer afford to wait.

This blog post originally appeared in Infrastructure Intelligence.

Dr Nelson Ogunshakin OBE

Dr Nelson Ogunshakin OBE

Chief Executive

Dr Nelson Ogunshakin OBE is the chief executive of FIDIC.