Doubt will only delay valuable investment

Many in the transport and logistics industries who will welcome the investment in GARL
Many in the transport and logistics industries who will welcome the investment in GARL
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Infrastructure independence is necessary, says Derek Halden

The recent announcement that the Glasgow Airport Rail (GARL) link is to be funded comes hard on the heels of the publication of the Scottish Government’s 20-30 year vision in the National Planning Framework which made no mention of GARL. The National Infrastructure Plan had explained that GARL could not be justified at the current time.

There are many in the transport and logistics industries who will welcome the investment in GARL, and others who will be disappointed that their competing preferred projects might slip down the priority list, with new pressure for limited resources. However, the real cost of promises made during election campaigns are much greater than the billions of pounds that government spends. Infrastructure is expensive and needs to be able to attract investment from across the economy. Investors need a high degree of certainty that their money is safe. Political juggling of transport priorities is incompatible with the stability needed for sustainable economic growth.

When we build major infrastructure there are big winners and losers, particularly for those who own land near the infrastructure. The land value changes adjacent to major transport projects often exceed the cost of building the transport projects many times over, particularly for rail projects but also large road projects. Certainty about government investment plans is needed to ensure that sustainable growth in the economy is achieved rather than playing into the hands of speculators and lobbyists.

When he published the new National Planning Framework in June, planning minister Derek Mackay restated the government’s view that the Framework, together with the Infrastructure Investment Plan, gave industry the certainty that it needed. If a logistics operator had made investments in June based on this new 20-30 year Framework, they now need to change them a few weeks later.

The need for greater stability has been debated in detail for more than 20 years. Former Olympic delivery authority chairman Sir John Armitt suggested last year that UK policy on infrastructure should be planned 25 to 30 years ahead, and be overseen by an independent commission. The independent body would be responsible for developing the proposals but would still be accountable to government for approval of their plans. However, successive governments have been reluctant to hand over power to an independent body. The advantages of being able to make political investment in transport are considered to outweigh the benefits of being able to set priorities remote from the churn of daily politics.

The Scottish Futures Trust has been developing innovative ways to fund transport projects but its remit falls well short of establishing certainty about the strategic transport priorities of government. Strategic priorities would best be defined as a performance specification for an independent body, a bit like the independent Bank of England is charged with meeting government guidelines for inflation.

Our industry needs to deliver guaranteed journey times and higher quality standards for its clients. However, current national plans offer no clarity for industry about whether it will take five or 50 minutes to drive a mile across Aberdeen in a few years’ time. Transport projects should be ideal for pension funds and other long-term investment packages delivering secure returns for many years. However, Scotland lags behind other countries in attracting investment for transport investment due in part to transport policy instability and uncertainty.

The transport investment needs of smart connected places across the country are huge, but the government needs to work with industry to deliver this. As the internet increasingly connects and helps to automate transport services, the economic growth opportunities from smarter travel infrastructure and services could be substantially greater than those that we have seen over the past 20 years in the telecom sector from new mobile phone connections to complement landlines. Uncertain action by government about its investment plans will stifle growth. As soon as the current round of elections is over the Scottish Government should look again at the case for an independent infrastructure commission.

• Derek Halden is immediate past chair (Scotland) of the Chartered Institute of Logistics and Transport


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