Infrastructure in Wales for prosperity, growth and jobs February 2016

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1 Infrastructure in Wales for prosperity, growth and jobs February 2016 Introduction Three principal organisations associated with the delivery of infrastructure in Wales have come together to outline the key infrastructure opportunities that can support and foster the delivery of a strong and sustainable economy in Wales. We have collaborated to assess immediate and longer term drivers for growth at various levels. We have looked at the differentiators that Wales can offer to the rest of the UK and to the world. We ve considered the requirements Wales has, and will have, to support itself and its people. We have reflected on the collaboration that is likely to take place between specific regions of Wales and England. We have focused on the natural assets and physical networks that support economic prosperity, sustainable growth and creation of jobs. NAVIGATION: Key messages in each section are emboldened, with three overarching recommendations on the final page (page 6) Context Over the past few months the construction industry in Wales has been encouraged by the collaboration that has been evident between UK and Welsh Governments on investment decisions for devolved and non-devolved infrastructure. This report is drafted in the same spirit, recognising that such collaboration must continue, but also that engagement between government, clients, investors, operators, designers and constructors is a critical success factor that will require focus and commitment for the best results. Wider consideration of the delivery challenges across all infrastructure in (and adjacent to) Wales will help to maximise the opportunity for efficient and effective delivery. It will ensure that peaks and troughs of resource requirements can be flattened, that investment in skills and resources is well planned. The outcome will be world class infrastructure driving increased prosperity, growth and jobs. Vision Wales has an opportunity to differentiate itself in infrastructure terms. Global challenges change the way we look at infrastructure provision. Climate change, energy security, water scarcity, urbanisation, population health and rapidly changing information communication are key drivers and challenges for Wales. Investment in Welsh infrastructure has a role in addressing these challenges, not only for Wales, but also for the UK. For example, the tidal streams in south and north Wales are a significant energy asset, Wales topography and geology provides a significant water resource asset and the landscape and heritage of Wales are significant natural and tourism assets. Creating a Vision for Infrastructure in Wales in 2040 is a key recommendation of this paper, as is strategic engagement around the supporting strategy and decision making. We believe these next steps are critical to the delivery of sustainable and effective infrastructure in Wales. The following sections focus on the key infrastructure challenges: Energy, Water, Communications, Transport, Cities & Enterprise and Skills. 1

2 Energy Energy security is one of the key issues facing Wales and the UK today. We must: Ensure the sufficient supply of electricity to avoid interruptions. Reduce our reliance on imported generation fuels for both cost and security reasons. Reduce the production of harmful emissions. Promote energy efficiency measures. We envisage Wales becoming an energy hub for the UK. Wales is ideally placed to play a very significant role in clean energy generation due to its many advantages including topography, tidal range and stream, high wind speeds and areas of low population density. All viable forms of renewable generation should therefore be encouraged and incentivised. A key factor leading to the greater reliance on imported fuels, which account for over 60% of the UK s requirement, has been the reduction in our nuclear capacity. The proposed new reactors at Wylfa need urgent progression. Source: The DECC predicts that by 2030 the significant majority of the UK s generation will be through nuclear and renewables. In the interim, whilst these low carbon sources reach the required maturity, Government should consider: favouring gas imports above coal imports; and increased support for R&D into the safe development of unconventional gas resources. When renewables and nuclear form a significant proportion of the energy mix, energy storage will likely be required to meet peak demand. Hydro-electric pumped storage in Snowdonia is a proven solution and hydrogen storage is a solution in development. The provision of energy is largely through private investment. The implementation of the required infrastructure would provide a very significant economic boost for Wales. This inward investment 2

3 would lead to further investment, not just in the energy sector. Our vision of Wales as an Energy Hub for the UK can provide Wales with clear differential. Water Wales is rich in plentiful supplies of water with a great potential to harness and benefit from this invaluable supply which is not only essential for communities but for business and industry. With close knit communities that are well used to working together supported by an enabling environment, the existing facilities and supplies must be converted into opportunities for the future supporting Green Growth. There are a number of specific challenges that merit further research and/or development: Innovative ways to transfer water e.g. potential use of canals and other means to move water across river catchments. Water is an increasingly valuable resource to share/sell. Investments and improvements to the existing water network improve efficiency and security of service and upgrade reservoirs for future growth with a long term strategic plan for water resources in Wales. Promotion of Wales plentiful water supplies linked to inward development domestic and commercial opportunities. Availability of water is already a business differentiator in some sectors (e.g. Celsa Steel in Cardiff). Helping the public to view water as a valuable resource, with consequent investment in water harvesting and conservation on a local basis. Finding ways of integrating water infrastructure into other differentiators can create winwin opportunities e.g. tourism opportunities linked to water, coastline, beaches, fishing, canals, rivers. Climate change and flood risk management create resilience challenges in Wales, so adaptation is essential. There is clear need for positive planning and investment in respect of these challenges, based on the latest available research and information. Communications The need for a resilient and effective communications network across Wales is a critical element of an infrastructure network fit for the future. Wales existing businesses and communities require it and it is a significant factor in the attractiveness of Wales for inward investment. Superfast Cymru is addressing this challenge with the rollout of Fibre and other technologies to address the different problems around location, geography and population density. It is essential that communications infrastructure continues to be developed and delivered alongside the other infrastructure. 3

4 Transport Wales must have a safe, attractive, affordable and accessible transport network that supports local and regional economic growth, prosperity and the alleviation of poverty. Wales needs a robust and resilient transport network with genuine choices for the travelling public and freight carriers alike. Improved high speed regional links with London, southwest England, the Midlands and northwest England would drive economic growth within Wales and ensure that Wales has the ability to compete for investment with other parts of the UK. Transport requirements across the porous border are particularly important and collaboration between northeast Wales/northwest England and southeast Wales/southwest England deserve particular attention in terms of capacity and resilience. Wales travelling public need a truly integrated public transport network relying on zero carbon modes of transport with smart ticketing that can be used anywhere within Wales and beyond, on any mode of public transport. This is likely to be driven, in part, by the Smart Cities agenda, which should also focus on improving our buses and trains, offering services such as WiFi which has recently been introduced on Cardiff s buses. Electrification of the rail network across Wales will also be vital. Furthermore, the implementation of the principles of the Active Travel (Wales) Act is a key element in providing transport choice for all, alongside the health benefits of walking and cycling. Further development of Wales natural deep water ports and transport links would set Wales apart on a global scale and attract new tourism opportunities and support Wales' global manufacturing and advanced manufacturing exports as well as the import of gas and oil. Welsh business must have fast access to the core Trans-European Network (TEN-T), with all modes having a role to play. There is a particularly strong role for road transport in movement of manufactured goods across the European economy, with about 44% of goods transported in the EU by road (2012). Wales would also benefit from a positive strategy for its airports, taking advantage of our long runways and coastal locations to offer viable alternatives to other UK and European international airports. Wales has a National Transport Plan (currently out for consultation) and the devolution of further transport matters is important for integrated governance arrangements to deliver truly integrated and innovative transport schemes. We look forward to seeing continued collaboration between the Welsh and UK Governments to expedite such delivery, particularly where innovative solutions or funding requirements may result (e.g. Cardiff City Region Metro) or where investment may benefit aligned Welsh/English regions. We have identified a number of key challenges that we believe merit consideration: The rail links between South Wales and Southwest England rely on the Severn Tunnel, an ageing asset with little redundancy presenting a significant risk to efficient links to London and Heathrow. The longer term arrangements for the Severn Crossings Toll are uncertain. In the context of an efficient and resilient TEN-T road and freight network, delivery of the M4 Corridor Around Newport (M4CAN) must remain the priority. Improvements associated with the recommendations of the Ministerial Task Force for Transport in North Wales. 4

5 Cities and enterprise Wales has six cities: Bangor, Cardiff, Newport, Swansea, St Davids and St Asaph. However, only Cardiff, Swansea and Newport are included in the Centre for Cities top 64 UK cities ( Most forecasts of population growth recognise that it will focus on urban areas, driving particular infrastructure requirements around current and future cities to ensure that they are Smart and liveable for their residents and visitors. In this context the growth will have particular challenges for transportation, energy, water, communications and waste provision. Wales is challenged in that its current cities are relatively small in UK terms. This is, and will continue to be, driving collaboration between cities and their wider regions. This is particularly relevant in terms of southeast Wales, southwest Wales and north Wales where transport and information links to support such collaboration will be increasingly critical. Indeed the announcement of the Super-city Region between Cardiff, Newport and Bristol was accompanied by a recognition that improved transport links and renewable energy opportunities will be key elements of that collaboration. Wales and the UK have focused on City Regions and Enterprise Zones which also directly influences specific infrastructure investment requirements at a local and regional level. High speed regional, national and international access is important for businesses operating in and from Wales (e.g. Airbus at Broughton, Sony at Pencoed and British Airways Maintenance and GE Aviation in South Wales). In North Wales, the specific challenges of the lack of a City Region as a driver for growth puts a different dynamic on supporting infrastructure, with transport links to/from Enterprise Zones in North Wales and northwest England being critical, alongside the provision for local movements. Source: Iconic events are another important consideration for urban development and wider infrastructure investment. In recent years we have seen the benefit that London 2012 brought to the vision and redevelopment for east London, with particular emphasis on the legacy for the immediate area, London and the UK. The Glasgow 2014 Commonwealth Games had a similar effect for Scotland. Wales has significant experience of hosting world class events: The Rugby World Cup in 1999, the Ryder Cup in 2010 and the NATO summit in 2014 are all examples of such excellence and where infrastructure investment or operation was critical to success. The proposed MotoGP Circuit of Wales at Ebbw Vale is another example of infrastructure and growth being delivered around hosting world class events. There is a real opportunity to build on this experience for a major event or programme of events, creating a focal point for a longer term infrastructure vision. 5

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