The 8th Annual Executive Brief at the Gleneagles Hotel in Scotland saw delegates focussing on Change and the UK Infrastructure Sector and, as a related manifestation of that change, the growing opportunities and challenges which are to be found in the PPP/PFI Sector.

 As has become the model for this event the delegate list contained strong representation across all the infrastructure industries together with representatives from the regulators. In the form of Steven Norris, the newly appointed Chairman of AMT-SYBEX, the Westminster dimension was also represented.
 
The event featured presentations from the following:

• Paul Cuttill - Chief Operating Officer, Networks, EDF Energy
• Jon Carlton - Director of Network Strategy, UK Transmission, National Grid
• Ronnie Mercer - Executive Vice-President, Operations, Pacificorp
• Chris LeFevre - Director, LeFevre Consulting
• Brian Gray - Managing Director Major Projects, EDF Energy Development Branch
• Philip Pacey - Chief Financial Officer, Metronet
• Steve Hurrell - Director of Finance, Tubelines
• Steve Norris - Chairman, AMT-SYBEX
  
  
  
  

Day One – Change and the UK Infrastructure Sector
 
In welcoming all delegates Andy Hamlyn observed how satisfying it was to see how the event had grown and evolved from relatively humble beginnings at the Belfry in 1998 into what was now a key date in many Utility and Transport sector diaries and was certainly the flagship annual event for AMT-SYBEX. Strong representation from the gas, water and electricity and transport sectors and from the regulators had become a given and ensured that the quality of this year's event would maintain the high value which returning delegates had come to attach to the event.

In setting the context for the presentations to come Andy pointed to major events over the past 12 months such as the massive investment which was now about to be undertaken in the replacement programmes for gas, water and electricity networks; the sell off by National Grid of 4 of its gas distribution networks; the moves in the rail industry to bring maintenance back in house and most recently the terrific news that London will stage the 2012 Olympic Games. The backdrop to these events was a range of major external changes such as increasing oil and gas prices, shortages of key labour skills, legislative changes and major natural environmental disasters. There was a strong need for resilience in the sectors’ business models to cope with the challenges which these circumstances presented, most especially in the key areas of accountability, responsibility and communications. This latter point was a theme which surfaced several times during the two days.
 
Before introducing the first speaker Brian Miller, Deputy Chairman of AMT-SYBEX reminded delegates of two sad losses to the community over the past 12 months. Alan Carey, former Operations Director, EDF Energy and Sir Robin Cook, former MP and Foreign Secretary had both sadly passed away. Each had been strong contributors to the AMT-SYBEX events and indeed Robin Cook had been scheduled to attend this year. Both would be sorely missed.
 
Paul Cuttill
Having worked his way over the past 30 years through various parts of firstly London Energy and most latterly the EDF Group, and as a past Chairman of the former Electricity Association, Paul brought a wealth of experience with which to open the first day’s debates. His presentation,”Regulation: Time to Squeeze or Grow” asked whether we should indeed look for less regulation and challenged the common criticism that regulation was too often an unwanted hurdle to running the business.

Jon Carlton
With a background in Regulatory Strategy for National Grid in the UK and in leading negotiations with US regulators on behalf of National Grid USA Jon was ideally placed to receive the baton from Paul Cuttill for his presentation, “Todays Drivers of Network Investment”

Jon opened by highlighting the current situation with regard to gas which showed supplies from the Sea declining faster than expected against a backdrop of steady demand growth. The resultant rapid rise in import demand was a major challenge for National Grid.
 
Ronnie Mercer
Being responsible for operating performance and results within Mining, Generation, Transmission and Distribution at PacifiCorp (a division of Scottish Water based in Portland, Oregon), Ronnie gave an insightful presentation styled “Turning the Price Review into Reality” and focussed on the delivery of Scottish Power’s plans agreed with OFGEM at the last review. 

Day One concluded with something of a look back at the journey so far and a thoughtful, even prophetic, look at what the future might hold. The need for the industry to communicate its issues and manage customer and regulatory expectation was perhaps the strongest theme to emerge and an accepted area of weakness. The need to be proactive, not reactive, was key and the utility industry especially needed to maximise the use of its collective voice. Drawing on his time in the political arena Steve Norris summed this up by stressing the need “not only to state the obvious but to keep stating it”.
 
The Panel was comprised of the following delegates
 

• Nick Goodall - Chief Executive, Energy Networks Association
• Les Dawson - Acting CEO, Southern Water
• Steve Norris - Chairman, AMT-SYBEX
• Chris LeFevre - Director LeFevre Consulting

Day Two – PPP/PFI: Opportunities, Challenges and Changes Within a Growing Sector

The second day comprised a collection of presentations detailing the emergence and evolution of the PPP/PFI sector and using a number of case studies to illustrate how the offerings and players within it have changed.

Before the first of the speakers Andy Hamlyn gave a quick summary of the previous day's main messages and highlights from the 4 key perspectives:

• Business – increase in CAPEX across the sector; need to control OPEX; put the customer first; be proactive
• Regulator – reduction in regulation, while a laudible aim, requires much greater understanding of the asset than currently exists within the majority of operators and is therefore unlikely to be possible for some time.
• Government – the need for understanding of the security implications which come from increased importation of gas; the nuclear debate needs to be kicked off in earnest; Government needs to help mitigate the external risks to supply but the solution lies predominantly ion the hands of the industry
• Customer – need for the customer to continue to inform the business but the business needs to communicate reality to the customer in terms of supply challenges and associated price increases. Customers may not be overly concerned about price increases because there is a sense of security of supply in return. One major incident could change all that.

Chris LeFevre
Chris’s involvement through his consultancy activities with in particular the health and transport sectors and his role as non-executive Director of Thames Valley Health Authority gave him strong credentials to give a presentation aimed at informing the audience just what PPP/PFI meant, how the concept came to be and the likely future of the sector.
 
During “PFI: How We Got Here and Where We Might Go Next” he gave an excellent chronology and definition of the sector’s development since the earliest PFI projects in 1992.

Brian Gray
Picking up where Chris LeFevre had left off, Brian’s presentation focussed on EDF Energy’s experience as a major player in the PPP/PFI market. Having managed the London Underground Power PFI contract with Seeboard Powerlink and in his current role with EDF Energy as Managing Director of Major Projects (which includes responsibility for inter alia EDF’s interest in the London Underground PFI) he was able to give a first hand account of EDF’s development of their PFI offering, their choice of route to market and to run through examples of their major successes to date.
 
Philip Pacey/Steve Hurrell
As further reinforcement of the message Phil and Steve took the conference through the Metronet/Tubelines joint experience with their London Underground PPP – the largest such deal to date at a value of £45billion of which around 50% is capital revenue.
 
Steve Norris
In delivering “PPP/PFI: The Political and Commercial Conclusions” and as the new Non-Executive Chairman of AMT-SYBEX, Steve set out to brig together the main messages from the morning’s speakers. As a Minister for Transport from 1992-1996 he was involved in the early development of the PPP/PFI concept and as Chairman of Jarvis PLC he has had very real exposure to both the positives and negatives of involvement in the sector.

Day Two concluded with another industry panel session to review the day’s themes and presentations. Brian Miller chaired the session and the panel comprised the following delegates:

•  Bob Baty - Chief Executive, South West Water Ltd
• James Le Couilliard - Commercial adviser, Office of the PPP Arbiter
• Steve Norris - Chairman, AMT-SYBEX
• Neil Scales - CEO and Director General, Mersey Travel

 
The main points from the session were:

Players in the PPP/PFI market had to be vigilant in monitoring signs of how the business model needed to change
PPP will only deliver genuine benefit where there is real competition and Government must not adopt an approach which discourages entry into the market
More needs to be done both in the short term and on an on-going basis to educate the media about PPP/PFI
Need to manage customer expectations better – there is a perception that the services provided by the infrastructure industries will always be available and incidents consequently receive sometimes disproportionate coverage.

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