Transcript Lord Macdonald`s lecture slides

THE INSTITUTION OF ENGINEERS AND
SHIPBUILDERS IN SCOTLAND
The MacMillan Memorial Lecture
BRIDGING THE
INFRASTRUCTURE
GAP
By
Gus Macdonald
STRICTLY CONFIDENTIAL
‘INFRASTRUCTURE TO 2030’ REPORT
(OECD, 2006)
INFRASTRUCTURE INVESTMENT NEEDS
Sector
($ US Billion)
Road
5,370
Telecoms
8,170
Electricity
4,210
Water
18,090
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STRATEGIC TRANSPORT INVESTMENT
NEEDS 2009 – 2030 ESTIMATES ($ BILLION)
Aggregate Investment: 2009 - 2030
Airports
Port infrastructure
2,200
830
Rail (incl. maintenance)
5,000
Oil and Gas – transport
3,255
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8.1%
8.1%
GDP GROWTH RATES
6.0%
9.5%
4.6% 8.1%
4.6%
4.6%
4.4%
3.8%
3.2%
3.2%
%
2.6%
2.4% 2.4%
2.6%
2.6% 4.4% 2.4%
2.0% 2.0%
2.0%
3.2%
2.6%
3.8%
3.8%
6.0%
3.3
4.6%
3.8%
1.2% 1.2%
3.3%
1.2%
2.4%
2.0%
1.2%
World
OECD
WorldWorld OECD
OECD
rld
OECD
2010-2015
2010-2015
2010-2015
2010-2015
2010-2015
China
China India India
China
China
2015-2030
2015-2030
2015-2030
2015-2030
2015-2030
2030-2050
2030-2050
2030-2050
20302030-205
Sources: IEA World Energy Outlook 2010, Energy Technology Perspectives, 2010. International Energy Agency
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WORLD ECONOMY SHIFTING EAST
25000
China
GDP ($PPP Billions)
25000
20000
China
United
States
25000
20000
15000
United
China
India
States
20000
15000
10000
India
United
Russia
States
Russia
India
France
15000
10000
5000
France
Russia
Germany
10000
5000
0
2007
2015
2030
2007
2015
2030
5000
0
0
Germany
France
Germany
China’s GDP to overtake US GDP before 2025.
2007
Source: IEA World Energy Outlook, 2009. International Energy Agency
2015
2030
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PASSENGER AND FREIGHT DEMANDOUTLOOK TO 2030
Index Base level 2010 =100
350
300
250
200
150
100
2010
Port containers
2015
2020
Air Freight
Air passengers
2025
2030
Global GDP
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GDP PER CAPITA GROWTH
Selected countries to 2030
$70,000
United States
$60,000
Germany
$50,000
$40,000
France
$30,000
Russia
$20,000
China
$10,000
India
$0
2007
2015
2030
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This year the UK came
28th in international
rankings. In terms of
productivity, this
infrastructure deficit
is as serious as our
budget deficit
David Cameron
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Privatisation is again
sweeping the world, with
governments hauling in a
record $213bn in revenues
last year
Financial Times
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GAS DISTRIBUTION COMPANIES
Company
1
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)
2
3
4
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ELECTRICITY DISTRIBUTION COMPANIES
Company
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
3
2
4
5
5
6
Ownership/ Main
shareholders
1
10
WATER COMPANIES
Regional
Company
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)
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INFRASTRUCTURE CHARACTERISTICS
 Natural
monopolies
or high entry
barriers
 Insulation
from
business cycle
 Portfolio
diversification
 Predictable
cash
flows – inflation
linked
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UK INFRASTRUCTURE –
OWNERSHIP ORIGIN
 UK
an attractive
market for global
investors
UK
Rest of
World
 Foreign
ownership
(shareholding) around
40% and increasing
Europe
 Investor
opportunities
for differing
preferences
Source: OFT
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PENSION ASSETS AS % GDP
- SELECTED COUNTRIES 2009
Netherlands
130%
Australia
82%
United Kingdom
73%
United States
68%
Canada
63%
Simple average
36%
25%
Japan
Spain
8%
Germany
5%
Italy
4%
Source: OECD Global Pension Statistics
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We are not going to
save the planet by
putting our country
out of business
George Osborne
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Curmudgeons and fault
finders who hold forth on
the impossibility of
renewals...the climate
sceptics and armchair
engineers
Chris Huhne
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INSTALLATION VESSELS
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INSTALLATION EQUIPMENT
Turbines loading
Transport to site
Transition piece
Pile driving
Turbine installation
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OFFSHORE O&M
Offshore substation and
accommodation platforms
Boat landing
Helicopter access
O&M Vessel
Mother-ship solution
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ELECTRICAL
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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.com
Prof. David MacKay
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BRIDGING THE GAP
 Multilateral
Funds
 Institutional/Pension
Funds
 Sovereign
Wealth
 Retail
Infrastructure
Products
Funds
 GFC
Stimulus
Packages
 Infrastructure
Banks
 Privatisation/PPP
 Corporate
 User
Investment
Payments
 Taxpayer
Support
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