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United Kingdom Infrastructure Report Q3 2008Published by: Business Monitor International Published: Aug. 6, 2008 - 67 Pages Table of Contents
AbstractIn his 'pre-budget statement' in early October 2007, Alistair Darling, the British finance minister(Chancellor of the Exchequer), said the government was planning to boost public sector investment intransport and infrastructure to GBP14.5bn (US$30bn) per annum by 2010. The money would be spent onpriority projects, such as widening the M1 (north-south) and M25 (London orbital) motorways.GBP1.3bn per annum would be earmarked for 'improving local and regional transport across the country',and the amount spent on modernising the national rail network would be doubled in 2008 and 2009, witha further GBP15bn earmarked for rail improvements in the 2010-2015 period. Funds would also cover theCrossrail project, to build a new rail link across the capital, which Darling described as 'the largesttransport project since the Channel Tunnel… essential for the competitiveness not just of the City ofLondon but for the whole country'. Road Construction Among the many road projects that are part of the infrastructure upgrade, two moderate-sizedconstruction works were up for bids in mid 2008. The first, a GBP69mn strengthening of the BidstonMoss Viaduct in the north-west, is being looked at by four different firms. Work includes steelworkstrengthening, painting, new parapets, lighting, resurfacing to slip roads and concrete repairs.Construction is expected to begin as soon as the contract is awarded. Contractors bidding on the secondproject, a GBP80mn upgrade to the Port Talbot Peripheral Distributor Road, include Costain, Carillionand Hochtief/Alun Griffiths. 2010 has been set as the start date on the Port project. Heathrow Upgrades Heathrow’s new Terminal 5, built at a cost of GBP4.5bn, opened in March 2008. It was immediatelyplagued with a number of problems and led British Airways to cancel a number of flights. The problemswere eventually worked out and the Heathrow expansion continued with the Heathrow East upgrades. InJune, Spanish developer Ferrovial announced that it had been granted a GBP7.65bn loan in its work onthe Heathrow East upgrades. Construction includes replacing Terminals 1 and 2 with a new modernterminal. The project is scheduled to be completed in 2012. New Port Construction A GBP1.5bn container port in Essex was approved by the government in May. DP World will be thedeveloper of the 1,850 acre London Gateway port site. Industry Forecasts BMI forecasts the construction industry growing at an annual average of 3.2% over the period 2008-12.The 2012 Olympics, and the lift this will give to construction of new transport and tourist infrastructure,offers support throughout the forecast period. However, over the next couple of years, the constructionindustry as a whole is likely to experience a significant slowing of growth, due to the credit crunch, whichhas had a particularly marked impact on the UK, partly due to its strong links to the US economy.Furthermore, the outlook for commercial construction in the city of London - especially office space -has darkened considerably, amid fears of a boom-induced oversupply of new units. As such, after peaking at 6% in 2007, BMI forecasts construction growth in the UK to almost stagnate in2008, with expansion of just 0.9% in real terms. In 2009, we anticipate that real growth for theconstruction sector will again be modest, at 2.7%, before a recovery to growth of 4.2% in 2010.By 2012, we expect the total value of the construction industry to register US$171.5bn, up moderatelyfrom an estimated US$152.9bn in 2008. Get Full Details About This Report >> |
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