STRICTLY CONFIDENTIAL The MacMillan Memorial Lecture BRIDGING THE INFRASTRUCTURE GAP By Gus...
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Transcript of STRICTLY CONFIDENTIAL The MacMillan Memorial Lecture BRIDGING THE INFRASTRUCTURE GAP By Gus...
STRICTLY CONFIDENTIAL
The MacMillan Memorial Lecture
BRIDGING THE INFRASTRUCTURE
GAPBy
Gus Macdonald
THE INSTITUTION OF ENGINEERS AND SHIPBUILDERS IN SCOTLAND
2
INFRASTRUCTURE INVESTMENT NEEDS
Sector ($ US Billion)
Road 5,370
Telecoms 8,170
Electricity 4,210
Water 18,090
‘INFRASTRUCTURE TO 2030’ REPORT (OECD, 2006)
3
Airports 2,200
Port infrastructure 830
Rail (incl. maintenance) 5,000
Oil and Gas – transport 3,255
STRATEGIC TRANSPORT INVESTMENT NEEDS 2009 – 2030 ESTIMATES ($ BILLION)
Aggregate Investment: 2009 - 2030
4
4.4%
2.4%
9.5%
8.1%
3.2%
2.0%
4.6%
6.0%
2.6%
1.2%
3.8%3.3%
World OECD China India
2010-2015 2015-2030 2030-2050
GDP GROWTH RATES
Sources: IEA World Energy Outlook 2010, Energy Technology Perspectives, 2010. International Energy Agency
4.4%
2.4%
9.5%
8.1%
3.2%
2.0%
4.6%
6.0%
2.6%
1.2%
3.8%3.3%
World OECD China India
2010-2015 2015-2030 2030-2050
4.4%
2.4%
9.5%
8.1%
3.2%
2.0%
4.6%
6.0%
2.6%
1.2%
3.8%3.3%
World OECD China India
2010-2015 2015-2030 2030-2050
4.4%
2.4%
9.5%
8.1%
3.2%
2.0%
4.6%
6.0%
2.6%
1.2%
3.8%3.3%
World OECD China India
2010-2015 2015-2030 2030-20502010-2015 2015-2030 2030-2050
5
0
5000
10000
15000
20000
25000
2007 2015 2030
China
United States
India
Russia
France
Germany
China’s GDP to overtake US GDP before 2025.
WORLD ECONOMY SHIFTING EASTG
DP
($P
PP
Bill
ion
s)
Source: IEA World Energy Outlook, 2009. International Energy Agency
0
5000
10000
15000
20000
25000
2007 2015 2030
China
United States
India
Russia
France
Germany
0
5000
10000
15000
20000
25000
2007 2015 2030
China
United States
India
Russia
France
Germany
6
100
150
200
250
300
350
Port containers Air Freight Air passengers Global GDP
PASSENGER AND FREIGHT DEMAND-OUTLOOK TO 2030
Ind
ex B
ase
leve
l 201
0 =
100
2010 2015 2020 2025 2030
7
Selected countries to 2030
GDP PER CAPITA GROWTH
$0
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
$70,000
2007 2015 2030
United States
Germany
France
Russia
China
India
8
This year the UK came 28th in international rankings. In terms of
productivity, this infrastructure deficit is as serious as our
budget deficitDavid Cameron
“”
9
Privatisation is again sweeping the world, with governments hauling in a
record $213bn in revenues last year
Financial Times
“”
10
GAS DISTRIBUTION COMPANIES
Company Ownership/ Main shareholders
1 Scotia Gas Ontario Teachers (Canada)Borealis (Canada)
2 Northern CKI (Hong Kong)
3 National Grid
Listed plc, UK
4 Wales & West
Macquarie (Australia)AMP Capital (Australia)CPPIB (Canada)Industry Funds Management (Australia)
1
2
3
4
11
ELECTRICITY DISTRIBUTION COMPANIES
Company Ownership/ Main shareholders
1 Scotland and Southern
Listed plc, UK
2 Scottish Power Iberdrola (Spain)
3 North West Colonial First State (Australia)JP Morgan infrastructure (US)
4 North East & Yorkshire
Berkshire Hathaway (US)
5 South Wales & South West and Central Networks
Pennsylvania Power and Light (US)
6 London, South & South East
CKI (Hong Kong)
1
2
2
34
5
5
1
6
12
WATER COMPANIES
RegionalCompany FDI shareholders
Northumbrian CKI (Hong Kong)Ontario Teachers (Canada)
Yorkshire Citigroup Infrastructure (US)GIC (Singapore)
Anglian CPPIB (Canada)Colonial First State (Australia)Industry Funds Management (Australia)
Wessex YTL Power International (Malaysia)
Thames Macquarie-led consortium (International)
Southern JP Morgan infrastructure (US)Future Fund (Australia)UBS Infrastructure (Swiss)CKI (Hong Kong)
13
Natural monopolies or high entry barriers
Predictable cash flows – inflation linked
INFRASTRUCTURE CHARACTERISTICS
Insulation from business cycle
Portfolio diversification
14
UK an attractive market for global investors
Foreign ownership (shareholding) around 40% and increasing
Investor opportunities for differing preferences
UK INFRASTRUCTURE – OWNERSHIP ORIGIN
Source: OFT
UK
Rest of World
Europe
15
Netherlands
Australia
United Kingdom
United States
Canada
Simple average
Japan
Spain
Germany
Italy
PENSION ASSETS AS % GDP- SELECTED COUNTRIES 2009
Source: OECD Global Pension Statistics
130%
82%
73%
68%
63%
36%
25%
8%
5%
4%
17
Curmudgeons and fault finders who hold forth on
the impossibility of renewals...the climate sceptics and armchair
engineersChris Huhne
“”
19
Transition piece
INSTALLATION EQUIPMENT
Pile driving
Turbines loading
Turbine installation
Transport to site
20
OFFSHORE O&M
Offshore substation and accommodation platforms
Boat landing
Helicopter access
Mother-ship solution
O&M Vessel
23
I wrote it because sustainable energy is
important. If you would like to have this book free, please help yourself: it is on the internet at
www.withouthotair.comProf. David MacKay
“”