Could the Chinese really be interested in Balfour Beatty?
The Sunday Times story that China Civil Engineering Construction Corporation had made an approach to the UK’s biggest contractor has certainly caused a stir.
Whether it happens or not, the notion certainly has a great deal of plausibility.
Chinese ambitions in UK infrastructure grow week by week, with a number of major investments. On the back of this, the Chinese government is keen to see spin-offs for its construction and manufacturing capability.
So far, Chinese firms have taken tentative steps into Britain and are doing so in joint venture with UK firms to learn about the market, though one Chinese contractor has recently gone it alone in winning a £300m contract with Swansea Tidal Lagoon.
But what better way to really ramp up ambitions than to buy a British company like Balfour Beatty?
“Chinese ambitions in UK infrastructure grow week by week, with a number of major investments”
The £8bn-turnover firm’s troubles may be deep but its technical expertise and client base still make it an attractive proposition.
Those with longer memories might remember the big push by Japanese contracting giants 20 years ago who made their mark in Britain on the back of inward investment, only to retreat several years later as new factories dried up.
Buying a big UK operation also provides a more obvious way of extending business beyond those projects with Chinese money, providing a solid and sustainable platform to build from in future.
Infrastructure needs open minds
You never have to look far to be reminded how cumbersome and protracted it can be delivering new infrastructure. It’s now looking likely, for example, that ministers will not respond to the Davies Commission on aviation until the end of the year, provoking fears of further prevarication over a new runway for the South-east.
Another long-running saga is the £1.3bn A14 improvement in Cambridgeshire. The project was abandoned after the 2010 election as austerity kicked in.
Highways England has this week retendered work after bids failed on quality concerns over safety proposals. That’s fair enough - and shows the agency means business in terms of safety.
“It’s a shame such a sensible proposal should be lost simply because it was commissioned by Ed Balls”
Nevertheless, it clearly throws up a bit of a challenge to contractors yet to get their minds around these new challenges.
Whatever the merits of the approach being taken, our on-off approach to schemes fuels the reputation that infrastructure in the UK is still too risky.
In an interview with Construction News this week, Sir John Armitt reaffirmed his idea of an infrastructure commission to bring more certainty to the decision-making process and less susceptibility to political vagaries.
With a great deal riding on private investment to fund UK infrastructure, is it time for the government to rethink its long-term approach to planning?
Yes Sir John’s was a Labour-backed idea, but the Conservatives could find a way of adopting it?
It’s a real shame such a rational and sensible proposal should be lost simply because it was commissioned by Ed Balls.