X'Trapolis 961M at Flinders Street

PPP: learning from the past

 

It is not difficult to find examples of failed public-private partnerships (PPP). From Mexico to France, and from Australia to the US there are many many examples of how PPP has failed to deliver the benefits intended. In France for example the trend to use PPP simply to keep expenditure off the public balance sheet has led to some disastrous projects and highway projects in the Americas have become roads to bankruptcy.

However it is not always a disaster and it doesn’t have to be.  Involving private finance in infrastructure from the very early days can bring a number of benefits and ensure that public projects are delivered in a timely and effective way. Sometimes it is the only way that projects can be delivered at all. But it is crucial that private firms are held to account throughout the life of the project with contracts that demand high performance levels for the full term, and like London’s forthcoming Thames Tideway sewer tunnel, that projects are structured to ensure that the cost of capital is as low as possible. Here the consortia tendered the cost of capital at 2.49% – significantly lower than the 6-8% that might typically be required for private returns. One of the biggest criticisms of PPP is that private money costs more than public money. It doesn’t have to.

So I was pleased to be asked by The Guardian (article here) to look at examples where PPP has worked, or is working, for companies and the public sector. Governments around the world, including US President Elect Donald Trump are looking to private finance to fund much needed infrastructure. Highlighting the ways in which this has been successfully achieved might help avoid some of the contractual catastrophes of the past. Bankers will tell you that PPP works best in sectors with clear revenue streams such as energy and aviation. For roads and rail it is much more difficult to make this work.

There are exceptions of course and A contract for 65 high capacity metro trains signed in November is the largest single order of new trains in the history of the Australian state of Victoria. It is also the state’s first ever public private partnership (PPP) for manufacturing. Unlike traditional contracts where trains are purchased as a commodity manufactured in the preferred location of the supplier, this partnership with the Evolution Rail consortium will ensure that sixty percent of manufacturing will happen locally creating 1,100 much needed jobs.

Job creation is key. Like the US, Australia has battled with the decline in local production industries particularly in the automotive sector. Ford closed its plant in October 2016 and Toyota and Holden will follow in 2017 leading to thousands of job losses. Not only does the new AUS $2bn PPP demand local manufacturing, further partnerships with Toyota and other local organisations will ensure that staff from the automotive sector are transitioned into the growing rail industry.

This and many other projects are covered in The Guardian article. Thanks to all that took the time to discuss the topic: ARCADIS, Pavegen, Mott MacDonald, Washington DDoT, Skanska Infrastructure Development, La Guardia Gateway Partners, Victoria Ministry for Public Transport and Major Projects and the IFC.

 

 

 

 

 

Exploring energy issues

Having storage in networks is a foregone conclusion in most industries. In the water sector reservoirs hold potable drinking water supplies and massive underground pipes act as additional storage for sewage. Gas is converted to liquid (LNG) and held in tanks for transportation or storage. But in the electricity sector storage remains elusive. And yet the need for this is becoming even more crucial as the UK seeks to decentralise and de-carbonise energy provision. How wonderful it would be if homeowners could store the energy generated by their solar panels, or farmers could capture the energy from their wind turbines for later use.

The good news is that this could happen sooner than we think. Two recent developments have thrust battery storage into a 12 month boom period. Before September 2015 Distribution Network Operators (DNOs) who bring electricity from the national transmission network into homes and businesses, had zero obligations from third parties on grid-scale storage. But today there are around 20GW of obligations.

Driving this boom is Ofgem’s £500m Low-Carbon Networks Fund and National Grid’s Enhanced Frequency Response competition. Since becoming available in 2010 the Ofgem finance has led to massive investments in new storage technology such as the UK Power Networks Leighton Buzzard £17.2m Smarter Network Storage Project. The primary aim of the 10MWh facility is to allow deferral of the need to reinforce the network, so instead of extending a substation, the battery provides peak storage at the times of year where load exceeds the local constraint.

And in September 2015 National Grid launched the UK’s first ever competition to provide network storage that would respond within 1 second. The organisation received 37 tenders containing 64 proposed solutions and 61 of these were batteries. This is expected to result in eight new battery storage solutions being built in the UK.

At the same time the cost of renewable energy generation is falling significantly with onshore wind and solar power having the lowest capital costs of all technologies, and figures from Scottish Energy showing that offshore wind costs have fallen by a third over the past five years from £136MWh to £100MWh. The firm has launched a pilot “smart battery solar power home” which can store excess solar energy in a battery.

Yet despite the incredible technical advances being made and strategy levers being implemented there remains a need for clearer long term energy policy if major new projects are to move forwards. Investors are viewing the market with caution and the UK’s position in the single energy market remains a negotiating point with the EU for Brexit negotiations.

All of this and more was covered at the Major Projects Association event “UK Energy to 2025 – getting major projects moving” which I attended as a reporter.  A summary of the day produced for the MPA can be read here.

 

 

 

 

Final breakthrough in Doha

I’ve been writing about the Doha metro project for years and from the outset the challenge was huge. Building three lines of subway simultaneously, in a location where bored tunnelling experience is limited, facing some unusual ground conditions, and working to an immovable deadline (FIFA World Cup 2022) gave the project a level of difficulty that not many experience.

But Qatar Rail has now announced the 76th TBM breakthrough (yes 76th) on the Red Line South marking the end of tunnelling for the first phase of the scheme. In just 26 months Doha has delivered 111km of new bored tunnel consisting of over 70,000 tunnel rings, using 7m diameter Herrenknecht earth pressure balance machines. It is a huge achievement.

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Delivering this in just over two years is even more impressive given that machine S-868 had to be shut down when seawater flooded its bore. Over 1000 new spare parts had to be sent over to Qatar from the Herrenknecht headquarters in Germany. But just three months later it was back in action.

Commenting on the achievement, Dr. Eng. Saad Al Muhannadi, Qatar Rail’s Chief Executive Officer said: “Completion of tunneling on the Doha Metro is yet another major milestone for the project and one we are delighted to have achieved on plan and to schedule. Until now 7.5km of above ground tracks viaducts have been installed and base slab and foundations have been completed on 33 stations. Roofs have been completed on 8 stations and roof slabs are progressing at 27 different stations. We are delighted to have been able to achieve all this within the timelines and budgets allocated and this is due to the hard work and dedication of all parties involved.”

Tunnelling started in July 2014 on the northern part of Red Line by TBM “Lebretha” in Al Qassar site. Now that tunneling has been completed we are moving to the laying of the tracks, awaiting the arrival of the train mockups, and working on the completion of the interiors of the stations with mechanical, electrical and plumbing (MEP) works),” says Al Muhannadi.

The first phase of the Doha Metro project is expected to be complete in 2020. By 2030, all the three networks – Doha Metro, Lusail Tram and the long-distance rail, which will link Qatar with the GCC Rail network – are expected to be complete. By 2020 Doha Metro’s 37 metro stations are expected to be operative, with an average journey time of two minutes between adjacent stations.

Contractors:

Red Line North the ISG joint venture – Salini Impreglio S.p.A./ SK Engineering & Constructing Co Ltd/ Galfar Al Misnad Engineering & Constructing W.L.L (22.8km of tunnelling)

Red Line South the Qatari Diar Vinci Construction JV (QDVS)/ GS Engineering & Construction Corp./ Al-Darwish Enginering W.L.L (32.6km)

Green Line contractor PORR Bau GmbH/ Saudi Binladin Group Company Ltd/ Hamad Bin Khalid Contracting Co. W.L.L.(33.4km)

Gold Line the joint venture Aktor S.A./ Larsen & Toubro Limited/ Yapi Merkezi Insaat VE Sanayi Anonim Sirketi/ Sezai Turkes Feyzi Akkaya Marine Construction/ Al Jaber Engineering LLC) (23.3km)

More Doha metro articles here

Going for Gold

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A Liebherr 630 EC-H 40 Litronic whcih can lift 5.8t at 80m reach on site at Las Bambas, Peru

Did you know that tower cranes are used extensively in the gold mining process? Neither did I until Cranes Today magazine asked me to investigate for their September issue. The first step was to find out more about gold mining itself and the key processes that strip the gold from the source rock. Expert Paul Wheeler at the Cambourne School of Mines explained:

“The chemistry of the process is that gold has great affinity with cyanide, so if you add this gold with large surface area (after crushing) to react with the cyanide solution the gold will then form a solution as a cyanide complex. What you can then do is add carbon into this mix and the carbon has an even greater affinity with gold which gets loaded on to the carbon from the solution.”

The final outcome is a substance called loaded carbon which is then taken to an elution plant where an acid wash strips the gold from the carbon after which the smelting process can take place. “It is a big industrial chemical engineering process as we are talking about very large volumes of rock to get small quantities of gold.”

This big industrial process needs cranes to change the crushing plant, insert equipment, maintain the motors and gearboxes and tanks. Firms such as Liebherr, SA French and ETAC all took the time to tell me more about how their cranes are used in the  mining industry and a full report will be in Cranes Today very soon.

Tunnel Vision

Over the past couple of weeks I have been looking into the research that is underway at UK institutions related to tunnelling. There was more than I expected. My 2000 word article is currently 3124 words. But I can’t bear to cut anything out. Should I omit some of the amazing work underway at Cambridge University which is using increasingly sophisticated sensors to give real time data that can be compared with the centrifugal and numerical model data? Or should I edit back the report on work at Edinburgh University where explosive spalling of concrete during fire and the influence of ventilation are major research topics?

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Edinburgh University’s testing rig for studying the explosive spalling behaviour of concrete during a fire

I could miss out some of the incredible work being done at the University of Leeds Institute of Resilient Infrastructure where world leading research is being carried out into the cumulative effect of seismic loading on tunnels – something that design codes don’t currently cover. They are going to use sensors on two live tunnels in Chile where there there is an astonishing amount of earthquakes every month. Have a guess how many (the article will tell you – unless I have to cut that part)!

With the raft of tunnels planned in cities around the world the research at Imperial College London into the effect of tunnelling on existing tunnels, surely must be included. More specifically the university has carried out an incredibly detailed study into the impact on cast iron tunnels. Similarly Nottingham University is focused on the interaction between tunnels and buildings and its research is giving more effective tools for evaluating the effects of tunnelling on piled structures. City University too is focused on tunnel/structure interaction as well as undertaking research supported by the Pipe Jacking Association.  A current research project looks at the effect of tunnel excavation on escalator tunnels. Another focuses on ground support at the tunnel face and the effects on stability and surface settlement.

New technology and construction methods too have to be included. Dr Alan Bloodworth, who this week took over as the head of the UK’s only dedicated tunnelling and underground space MSc at Warwick University, has been studying sprayed waterproof lining systems, examining whether composite action occurs between the primary and secondary sprayed concrete linings due to the bonded waterproof layer (it does). How can I cut that?

And what about the future? Universities have research plans a plenty. I simply must include those or how will people know that Cambridge wants to create virtual tunnelling models and research the redistribution of loads around cross passages; that Edinburgh is working on new design strategies for mitigating concrete spalling in tunnels during fire or that Leeds University will create a virtual platform where the public can view the earthquake response of tunnels in Chile?

As I said there was more than I expected. There is nothing boring about tunnels!

 

 

 

 

 

Don’t be afraid of flexibility

The Major Projects Association (MPA) last week held its latest event on gender balance examining “three things that work”. PwC, Royal Mail Group and HS2 Ltd shared their experiences of improving diversity and inclusion with attendees and I summarised the event for the MPA in a report that can be viewed here

As usual the content of the meeting was thought provoking and useful, with each company outlining initiatives that were improving their businesses, but there was a recurrent issue that the meeting kept visiting – flexible working.

There are many reasons why employees, particularly female employees, need to work flexibly. But there are also many reasons why they may not feel comfortable asking to do so. From a fear that they many be viewed as less committed, or a (reasonable) expectation that the request will be rejected, many people don’t make flexible working requests. Some will then struggle to work the hours required, others will simply leave. Both scenarios are bad for business. And yet as Pauline Broadway, business change director at consultant Afiniti pointed out, flexible working is a two way street benefiting both business and employee. With strong communication, good planning and continuous reviewing, teams can operate highly successfully with members that may be part time, work in different locations or work alternative hours.

In fact Andy Woodfield, partner at PwC and leader of the company’s successful reverse mentoring programme, observed that when employees worked flexibly the whole team’s performance improved. Why? Because the flexible employee uses their working time as effectively as possible motivating the team around them and driving progress.

Of course there are many companies that have not yet come around to the benefits of flexible working, or believe that they can’t accommodate it. But these are not reasons not to ask for it.

With two young children myself I always work flexibly and I am proud to do so. Maintaining my career while supporting a family is a difficult balancing act, requiring intense focus that was not so crucial when I had more time on my hands.

The growing number of success stories of flexible working, the need for companies to ensure that they retain more female staff, the acknowledgement that diverse companies are more profitable, and the technology revolution that enables us to be “in the office” from anywhere means that there are more opportunities than ever for people to work flexibly, so don’t be ashamed to ask. It might even be better for the company too.

*Of course for working parents things don’t always go to plan and I’ve previously blogged about that here: http://www.huffingtonpost.co.uk/bernadette-ballantyne/working-parent-problems_b_7395686.html

 

 

 

 

 

Rough times

Demand for rough terrain cranes fluctuates along with the oil price meaning that manufacturers of these versatile, robust lifting machines have had a hard time of it lately. In fact mobile cranes in general have been hard hit as the oil price maintained a steady fall since 2014. So how are manufacturers managing the soft market? Cranes Today magazine asked me to find out.

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The Sany SRC 885

The answer is that manufacturers are doing a lot. From improving their own production methods and product designs to reducing prices and launching new machines, there is a lot going on in this segment. I was particularly interested to learn that most of the investment in new cranes is being aimed at the higher capacity end of the market from 80T upwards. Greater capacities and longer booms are where the development effort is focussed. To find out who is launching what, which booms are longest and what is new look out for the July issue of Cranes Today.

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The new Grove GRT 8100