info@invennt.com  Tim Fitch: 07816 517590  Brendan Morahan: 07816 514505

Davies Commission – start of the end, or…?

On the 16th January 2014 I attended the inaugural Runways UK Conference (www.runwaysuk.com), along with over 400 others. The attendees reflected the whole spectrum of interested parties and their advisers.

Sir Howard Davies made his first public announcement since the publication of his Interim Report in December 2013. This report shortlisted 3 schemes, namely

At the Conference Sir Howard announced that, in line with the commitment made in his Report, the Commission will now commence an assessment of the Inner Estuary option to enable this to be ruled in or out by autumn 2014.
The Davies Commission has a duty to assess the local impact of each scheme in relation to the broader economic value for the UK and the needs of consumers. It is clear that this is going to be one hell of a task!

There are two key hurdles to be overcome, each of which are extremely complex – failure to do so will result in the current exercise being seen as an expensive waste of public money.

The sustainability dilemma

If the issues were assessed against the standard three pillars of sustainability, namely environmental, social and economic, it quickly emerges how important it is for the UK to get this right.

Picture2-300x232Environmentally, noise appears to be the main concern, but there are clearly others and the real risks must be recognised and addressed. There is no doubt that these issues are being competently highlighted by interest groups and the Commission must ensure that its recommendation fully and appropriately takes these concerns into account. With the advancement of technology and need driving invention there is a belief among the short-listed teams that such risks can be managed.

From a social perspective, increased capacity will give greater choice and flexibility of destinations for both business and leisure outgoing passengers and will increase the attractiveness to all incoming passengers. Employment will be generated in both the construction phase and in operation and will be a catalyst for further employment opportunities in the surrounding areas. However some communities will be adversely impacted upon and there will be a need to ensure that appropriate compensation is factored in to any recommendation.

Economically, there is a strong case for the additional capacity promoting greater inward investment and export opportunity. It would appear that funding appetite is high, and well thought through schemes usually generate investment interest. However the cost will be significant and the funding mechanism will need to reconcile the returns expected by investors with the burden placed on public finances and/or the passengers.
The Davies Commission must wrestle with the immense detail beneath these issues if it is to arrive at a recommendation that is accepted and enacted.

The political dilemma

If the issue of sustainability, as outlined above, is not difficult enough the potentially greater issue is political.

For some time, UK Governments have avoided addressing the capacity constraints in airport infrastructure and the current Commission does not make its final recommendation until after the next planned General Election in May 2015. Lord Adonis made the point at the Conference that politicians have a duty to keep an open mind until the Commission has made its recommendation and look at it with a fresh pair of eyes.

As a consequence, UK citizens will be electing a Government without knowing what they are voting for in respect of this major piece of capital infrastructure. It begs the question as to what the legitimacy of a decision after an election will really be and could result in further periods of procrastination.
This is clearly a major trust issue and calls for strong political leadership.

Such leadership is needed now if a negative impact on investor confidence is to be avoided. The UK construction sector has demonstrated its ability to respond positively to the need of major infrastructure programmes such as the London Olympics and Chek Lap Kok Airport in Hong Kong but it needs clarity to be able to effectively predict and plan for the resources needed. At the Conference, Nelson Ogunshakin urged political parties not to prevaricate but to work towards gaining cross-party will on a consistent policy that is transferrable, whatever form the Government takes.

Clearly the ability to lead in a collaborative way will be a key success factor for future governments in general and in resolving the UK airport capacity issue in particular.

Ready for take off?

It could therefore be argued that the success of the Davies Commission will not be judged solely on how to piece together the sustainability jigsaw but also on how well it assists in unblocking the political log-jam.

Keep up to date with the debate join our group on LinkedIn.

Airport Infrastructure UK http://linkd.in/1ffqjL0

Brendan Morahan

Brendan Morahan is an experienced construction project and business leader.

He has led teams delivering annual turnover of £400m, and led business growth during economic downturns.

As Executive Board Director at Taylor Woodrow Construction, Brendan led a focus on value as opposed to volume, helping the company win BAA’s 10-year £6.9bn capital framework, as well as managing the successful integration of acquisitions into the group.

An experienced and committed proponent of collaborative working and long-term commercial relationships, he knows what can make – or break – the fortunes of a successful business.

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