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Report on the DIT Latin American and Caribbean Roadshow 2019

Report on the DIT Latin American and Caribbean Roadshow 2019

Glasgow, 25 March 2019

The Roadshow (one of five being held in locations around mainland Britain) was organised by the Department for International Trade (DIT) to provide businesses with an insight into the markets of Latin America and the Caribbean.

Joanna Crellin, HM Trade Commissioner for Latin America and the Caribbean, led the event, accompanied by senior trade experts located in Embassies and Consulates throughout this vast region, and senior officials from the Embassies in the UK.

Key points were:

  • the region is home to 650 million people with a growing middle class. Collectively, the region’s 48 countries and territories constitute world’s third largest economy after China and the USA;
  • key growth sectors being targeted by DIT include the extractive industries, life sciences, security and defence, infrastructure, education and financial services;
  • the UK seriously underperforms in terms of trade in the region, with only remnants the once-strong relationships remaining. However there is a positive legacy with a respect for British quality and values;
  • the area is far from homogenous, a point stressed by the DIT regional representatives, but many common traits are shared, especially the importance of personal relationships and trust: “it is a face-to-face place” as one person put it;

When asked what to bear in mind when trying to enter this market, DIT officers highlighted the following:

  • use the DIT offices, chambers of commerce and business associations as multipliers, to help make contact with more of the right people;
  • be aware of politics and the potential implications of changing government, for example in Brazil and Mexico recently;
  • go native – spend time in country and meeting potential trading partners;
  • differentiate on the basis of quality and innovation.

Thank you to the team at DIT and the various speakers for organising a useful and informative event.

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Education PPPs in Azerbaijan

We are very pleased to be working in an international team to support the Ministry of Education in #Azerbaijan on a long term donor-funded assignment to explore opportunities to expand the use of public-private partnerships (#PPP) in the Education sector.

This country of around 10 million people is a place of great contrasts. In the capital Baku, a glitzy modern centre sits alongside ancient Silk Road caravanserais, while an easy drive on good roads crosses the arid coastal desert before rising into the Caucasus – a mountain range as high as the alps.

Azerbaijani, a language closely related to Turkish, is the main language, with most people also speaking Russian.  English is not widely spoken, although this is changing rapidly as international links grow.  Most of the country was part of the Russian empire in the 19th century then the USSR until independence in the early 1990s.

Education is secular and compulsory from years 1 to 9 plus a pre-school year, and a high proportion of pupils do an additional two years in school. Most then go on to college or university.

We are looking forward to identifying the most suitable PPP modalities for addressing challenges within the education system here, testing their feasibility, and helping develop capacity and capability within the country.

 

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Edinburgh Centre for Carbon Innovation – our new home

On 1 February 2019 we will relocate to the Edinburgh Centre for Carbon Innovation.

This move places us within Edinburgh University’s hub of  knowledge and expertise in ‘low carbon’ policy, training and education. We will be working in the first listed building in the UK to achieve the BREEAM (building sustainability) ‘Outstanding’ certification, and we will be sharing this collaborative environment with University start-ups, Masters students and established organisations in the sector.

We are looking forward to developing partnerships where our knowledge of finance and economics in the infrastructure sector can be applied in low carbon initiatives in the UK and around the globe.  We are confident that our growth in Asian markets will be of value, and that our Directors’ personal involvement in community renewable energy schemes and low carbon housing projects will contribute to the wider objectives of ECCI.

From 1 February 2019 our address will be:

Caledonian Economics – Edinburgh Centre for Carbon Innovation – High School Yards – Edinburgh EH1 1LZ – Scotland, UK.

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NHS Greater Glasgow & Clyde – DBFM Financial Close

Yesterday, 20 December 2018, the latest NHS Greater Glasgow and Clyde healthcare PPP reached financial close.  The DBFM healthcare project will procure two new facilities (the new Greenock Health Centre and Mental Health In-patient facilities at the Stobhill Hospital) from hub West Scotland under a single hub/DBFM contract.  Under current plans, a third facility will be added to the contract under a pre-agreed change procedure during 2019.

We supported the NHS in-house team and were responsible for a range a financial transaction support activities including assessing financial submissions from the private sector partner, confirming that returns, margins and fees are consistent with benchmarks and confirming that the financial model is consistent with technical project details.   On the day of financial close we supported rate benchmarking, financial model optimisation and completion activities.

 

Spinning logo by Calum Finnigan

3D Animation Intern

Our recent Intern, Calum Finnigan, produced this slick 3D animation of our corporate logo as a little side project.  Calum is a graduate of the University of Edinburgh (BA with honours, Fine Art) and Edinburgh College (HND, Grade A, 3D Animation) and is interested in short or long term opportunities to apply his skills.

Spinning Graphic by Calum Finnigan

Spinning Graphic by Calum Finnigan

More examples of his work and his contact details can be found on his website , his blog, and on Linkedin.

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Jedburgh Intergenerational Campus – financial close

As financial transaction advisers to Scottish Borders Council on their Jedburgh Intergenerational Campus project, we are pleased to report that Financial Close was achieved on 25 October.

The new £32 million education campus will replace three existing schools in the town and will include #nursery, #primary, #secondary, and further educational facilities.

The project is being delivered in partnership with hub South East Scotland using the standard Scottish PPP/DBFM structure, and achieved financial close 13 months after the business case (known as the New Project Request) was approved.

This successful project continues our relationship with the Council, having previously advised them on the development of the new Kelso High School which achieved Financial Close in February 2016 and which opened on time and budget in November 2017.

Glasgow School PPP

Glasgow City – two new Primary Schools

The Glasgow City Council procurement of the new Blairdardie and Carntyne primary schools reached financial close on 23 October 2017, and the first of the schools, Carntyne, was handed over on time and budget on 19th October 2018, with Blairdardie on target for hand over on time in February 2019.

 The new primary schools have been developed under a single compact PPP contract between the Council and  hub West Scotland.

As the public sector Financial Transaction Adviser on this PPP we supported the Council’s in-house team and were responsible for assessing financial submissions from the private sector partner. This included confirming that returns, margins and fees are in line with the market and consistent with pre-agreed levels.  We worked closed with technical specialists to calibrate the payment mechanism, and supported commercial negotiations.

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Report on the Social Value Gathering 2018

Report on the Social Value Gathering 2018,

Our Dynamic Earth, Edinburgh, 21 September 2018

The ‘Gathering’ was designed as a forum to bring together leading thinkers and practitioners in the area of ‘Social Value’ from the fields of private enterprise, charities, public sector and academia.

Traditional methods for measuring and reporting activities such as shareholder returns and GDP are inadequate because they fail to measure how programmes, organisations and interventions contribute to society.  The Social Value Portal, who arranged the event, advocates a data-driven approach to building an understanding of wider social and environmental impacts of business activity and public sector action within a common framework applied across an expanding network of organisations.

From 1D to many D

The concept of Social Value is familiar but difficult to define.  It is sometimes thought of as corporate social responsibility, or contributing to good causes, or simply just the desire to do the right thing.  Some delegates made the point that much of the ‘good work’ done by business is quite one dimensional – for example charity fundraising – very valuable in itself, but not really synergetic.  True social value gains are found where enterprise, the public sector and communities intersect and align towards a common purpose in multi-facetted, multi direction ways.

Sound Bites

An impressive range of speakers presented details of various initiatives and policies including details of Scottish Government programmes to bring vacant and derelict land back into productive use, approaches used by Balfour Beatty and Scape Procure to broaden social benefits in the construction sector, the Adopt an Intern scheme which seeks to address under-employment of graduates, and the Social Bite experience of helping address homelessness in a commercial context.

Breaking out the lessons

Within various break-out sessions participants asked what the financial sector can learn from charities in reporting social impact of investments, and what urban parts of Scotland can learn from the remarkable number of major community enterprise initiatives in remote and rural parts of the country.  Other sessions asked how public procurement can deliver inclusive growth and how social value can be built into urban investment plans.

Coffee and Chips

The event stressed the importance of networks, being essential to finding synergies between organisations, and for gathering data across a broad front.  The points was illustrated using interactive coffee cups that every delegate received with their welcome pack.  Electronic tags within the cups logged connections made by delegates, earning tokens that could then be used to ‘vote’ for favourite projects in a ‘Social Value Marketplace”.

Lessons

The main points I took from the day were:

  1. society’s needs once lent themselves to centralised solutions – for example large scale health interventions or larger central power plants. Society’s needs today are distributed – for example care for chronic conditions in the home, low carbon energy generation, storage and use. This will require a shift from a state that focusses on centralised delivery of services to a state that focusses on developing relationships that meet the needs of the individual within a local context.  This shift will need new ways of measuring impact and effectiveness, including decoupling carbon from GDP.
  1. decades of dispiriting depopulation and economic decline are being reversed in many remote and rural communities. The best examples of community enterprise and realignment of local services to meet local needs are to be found among our islands, far coasts and rural hinterlands.  There is much our towns and cities can learn from them.
  1. the choice of financial investment products available through pensions, ISAs and other tools bamboozles most private retail investors. There is no easy way for the layman (or even industry specialists) to gauge the impacts of investments on society or the environment.  This is a huge missed opportunity to use customer choice of investments as a force for good.  A common measurement and reporting framework would help in this regard, perhaps alongside appropriate regulation.

Martin Finnigan

www.caledonianeconomics.com

24 September 2018

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NHS Highland – New Hospitals in Skye and Badenoch/Strathspey

We are helping NHS Highland procure two new DBFM/PPP hospitals from hub North Scotland. The new hospital in Broadford on the Isle of Skye will replace the ageing Dr MacKinnon Memorial Hospital, and the new hospital in Badenoch and Strathspey will centralise services currently delivered through several dispersed inpatient units that are not fit for purpose.

Within a wider redesign of health and social care services, the new hospitals will deliver a range of benefits including:

  • greater numbers of people being cared for at home;
  • reduced length of stay in hospital;
  • co-location of specialisms and related services;
  • equality of access to services;
  • dementia-friendly inpatient facilities;
  • more dignity and privacy for patients – 100% single rooms with en suite.

The two new hospitals will be developed under a single DBFM/PPP contract using the Scottish hub ‘compact PPP’ modality.

We will support the NHS in-house team and are responsible to assessing financial submissions from the private sector partner, confirming that returns, margins and fees are value for money and consistent with pre-agreed levels.  We will liaise with technical specialists to calibrate the payment mechanism and Key Performance Indicators (KPIs), and will contribute to commercial negotiations.

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What can we learn from the best Smart Cities?

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OUR REPORT ON THE SMART CITIES EVENT, DEN HAAG, July 2018

In 1950, around 70% of the world lived in rural areas and 30% in cities.  By 2050 these percentages will have reversed (UN World Urbanisation Prospects, 2014). Much of this growth and shift will be in developing economies.  It is said that if everyone on earth lived a typical Western lifestyle, our ecological footprint would be so large that we would need four planets to live on!

As our world’s population grows and becomes more urban, we must become much more efficient and ‘smart’ about how our cities function.

Last week I took part in the 8th edition of the annual Smart City Event in the Hague, Netherlands. The use of smart technology and big data is already evident in the Netherland’s energy, waste and transport systems, health & social care provision and in its prison service.

Delegates and speakers from governments, business, academia and knowledge institutions shared and discussed their perspectives on what makes ‘Smart Cities’ and whether the term is meaningful.

One speaker, Oualid Ali, President of the Futures Cities Council asked a searching question: what is the alternative to being a ‘Smart City’? An ’Intellectually Challenged City’? Ali noted that digital technology and data are nothing without innovation and ideas from people.  His preferred term is “Future Cities” with the focus being on innovation, digital or otherwise.

When the jargon is stripped away we are left with the principles of sustainable development, within which ‘smart’ or digital solutions move cities toward our overarching goal of sustainability.  There are huge opportunities for cities to gather and use data to reveal patterns of use and behaviour in order to improve the efficiency and effectiveness of our buildings, transport and flows (waste, water, energy). Being ‘Smart’ is about making these flows more efficient and sustainable for the benefit of the City’s people.

City development is not a simple topic which can be easily labelled.  As we saw during the conference, the possibilities for innovation are endless.  However, here are the top five questions cities should ask as they strive to become ‘Smarter”:

  1. Do you really understand the needs of business and citizen? There is no single blueprint to make Smart Cities. Does your approach consider challenges facing your particular city (perhaps energy, waste management, mobility, or safety) and understand what your citizens consider to be a ‘good city’ to live? A top down ‘government knows best’ approach rarely works.
  1. Are interests aligned? Are you bringing your public sector, businesses, academia, consultants and civil society together with a goal of knowledge sharing and learning best practices from others? Ingenuity and a culture of openness is needed if you are to move toward a city that is fit for the future.  Organisations such as C40 Cities support this approach at an international level.
  1. Big data means big security – are you ready? The implications of gathering and storing vast quantities of data and the importance of cyber security cannot be an after-thought. Do you understand the levels of risk involved, are they at the fore, how good is your understanding of legal and regulatory frameworks?
  1. How will you get everyone over the digital divide? How will you cater for citizens who cannot access digital data and technology, perhaps because of health, status or poverty? Such citizens risk becoming marginalised, perpetuating urban inequalities.
  1. How will you pay for it? The public sector will be a key enabler, but what blend of public and private financing will be required? How will you structure the blend to fit your context and the initiatives you wish to pursue, minimising risk and maximising benefits?  An element of ‘’spend to save” will usually be needed to realise long term efficiencies and cost savings, and you should reflect appropriate timeframes in your upfront financial analysis.

Interest in ‘Smart Cities’ has grown rapidly and is now central to urban policy, planning and development.  But do ‘Smart’ or ‘Future’ cities’ offer a panacea to development and the challenges our cities face today?

Of course not, but these concepts reflect a direction of travel towards a world where we tackle the challenges of population growth, climate change and resource shortages.  More efficient, sustainable cities will better serve the people who live in them today and in the future.

Written by Lynne-Marie Thom who leads the Smart Cities, infrastructure and local economic development activities at Caledonian Economics.  She has a background in financing and implementing national infrastructure projects.  She worked with Scottish Government to develop the 2015 National Infrastructure Investment Plan including the Digital thematic component, and has helped deliver infrastructure at national, municipal and local levels, using a variety of innovative funding mechanisms to target development of growth-enabling infrastructure.