One of the UK’s largest pension funds has called on the government to give the go-ahead to the £6bn TransPennine Tunnel.
Greater Manchester Pension Fund chair Kieran Quinn told Construction News that the “argument for the tunnel had been under-played” and said his fund would be willing to back the scheme if it went ahead.
“If we’re really talking about releasing the potential of the North, and creating a link between Liverpool, Manchester, Leeds, and beyond, then the tunnel has to play a part,” he said.
“Every economic assessment I’ve seen – admittedly drafts and guesstimates – have said the economic benefits that will be released from that connectivity are huge, so we’ll continue to press its case.”
He added that “if the circumstances were right” the pension fund could be a potential equity partner in the tunnel.
“Even if we commit £500m, that’s under 1 per cent of our holdings – it’s not as if we’re raiding the piggy bank to get those funds,” he said.
The government first published its five potential routes for the £6bn tunnel, which will link the M60 in Greater Manchester to the M1 in West Yorkshire, in August last year.
Highways England said later that year there was “a strong strategic case” to build the tunnel, but said it would take between 20 and 25 years to build if consent and funding are both secured.
‘We want to have a direct relationship with our contractors’
Read Mr Quinn’s full interview with Construction News, where the pension fund chief outlines his vision for how contractors and funders can work together to bring investment opportunities forward
Investing in the tunnel would be “well within the normal risk parameters” for the GMPF, Mr Quinn added, but would give the fund “a brand new opportunity to do things on a larger scale, and much more direct.”
In a wide-ranging interview with Construction News, Mr Quinn argued that pension funds should take a more active role in projects, and will need to engage with contractors at a much earlier stage.
“We’ve started to have more of a conversation with contractors because we want to take more direct holdings in projects,” he said.
“It also means that the relationship between contractor and funder becomes much more powerful.”
This would include the fund building fair payment terms and social value into its tenders, he added.
On the fund’s investments, Mr Quinn said it was “actively seeking” more projects to invest in, with plans already under way for a major office redevelopment in the centre of Manchester.
This would likely rival the Grade A One St Peter’s Square in scale, which was backed by the fund and completed by Carillion in 2014.
Mr Quinn also revealed that a number of London-based firms are looking to relocate or invest in the Greater Manchester area, with the fund willing to partner with developers to get schemes off the ground.
“I’m having a lot of conversations with plenty of London-based businesses that want to come to Greater Manchester because they like talking to people like us; they see an opportunity here,” he said.
“If they can come into partnership with us, it de-risks it for them.”