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.
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.
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.
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.
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”.
The main points I took from the day were:
- 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.
- 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.
- 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.
24 September 2018
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.
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”:
- 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.
- 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.
- 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?
- 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.
- 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.
We have been appointed by the International Finance Corporation (IFC) to support them and the Municipality of Prishtina with the preparation and implementation of the first Education PPP project in Kosovo. The project will see two schools rehabilitated and four new ones built. Our role will be to help address various technical and commercial issues as part of IFC’s due diligence and transaction structuring.
This will be the first Education PPP in Kosovo, and continues our leading role in structuring Education PPPs worldwide. It adds IFC (part of the World Bank Group) to the list of Multilateral Development Bank partners with whom we have worked on Education PPP assignments, a list that also includes the Asian Development Bank, Inter-American Development Bank, Development Bank of Latin America and the European Investment Bank.
The ‘One Year Review’ of e-sgoil, written by our Education Specialist Bruce Robertson and Director Martin Finnigan, has been published by Comhairle nan Eilean Siar, (Western Isles Council). Our review documents the remarkable success of this initiative which takes Smart Cities concepts and applies them in a rural Smart Islands context.
Careful data gathering and analysis, reliable communications infrastructure and technology-literate teaching staff have opened up new curriculum and pedagogical opportunities throughout the islands.
The potential of this approach to extend from schools into vocational and higher education has been demonstrated, and the impact on Cosnadh (employment), Cánan (language), Cultar (culture) and Coimhearsnachd (community) is clear.
The report assesses progress against the funding objectives, describes the transformational business model, and identifies the current and potential economic impacts.
The e-sgoil model is inexpensive, efficient and scalable. It is applicable in remote, rural and dispersed communities regardless of location. The report is can be downloaded here.
This week, on 21 and 22 May 2018, we attended the first Colombia Investment Roadshow in London, a joint event whose organisers included British & Colombian Chamber of Commerce; the British Embassy in Bogotá; the Department of International Trade teams in Colombia and London; The Foreign and Commonwealth Office Andean Desk and the Prosperity Fund Colombia; The Colombian Embassy in London and Procolombia.
The purposes of the event were to present the key infrastructure projects in Colombia, to explain the investment environment and to support joint initiatives to address some of the challenges that are still experienced in the sector and in the country.
A series of speakers explained the economic backdrop and investment outlook in the country, and provided personal perspectives on experiences of developing projects there. Key projects in rail, rolling stock, Smart Cities, schools, healthcare, waterways, airports and water treatment were described in detail, including explanations of the procurement process and the roles of the main protagonists.
The main points we took from the event were:
- the prospect of imminent accession to the OECD provides evidence of the rigorous process of reforms, policy and regulatory improvements that have been implemented. Between 2010 and 2017 the economy grew an average of 3.8% a year and it has one of the highest levels of foreign direct investment in the region;
- the final peace agreement concluded with FARC in December 2016 brought to an end half a century of armed conflict, and saw the start of a 15 year implementation period;
- improved connectivity and the development of Smart Cities are key to the successful implementation of the peace agreement. A large transport infrastructure initiative has been launched to tackle infrastructure bottlenecks that are holding back development, especially in rural, conflict-affected areas;
- in 2017 the Economist Intelligence Unit singled out Colombia as being well-prepared for infrastructure PPPs in the region. Forms of PPP are being used for the Bogotá Metro, renewal/operation of the Transmilenio BRT system, Cauca road network, El Dorado II Airport and to restore navigability of the Magdalena River. Pilot PPPs are being developed for schools and hospitals in Medellín, Barranquilla and Bogotá.
At Caledonian Economics we look forward to building on existing relationships in Colombia and developing new ones, so that we can play our part in the continuing success of this remarkable country and helping create, as one speaker put it, “a piece of the peace”.
On 18 May 2018 Martin Finnigan joined around 50 delegates at the Why Uruguay? event at Tower Bridge, London, organised by Uruguay XXI (the National Investment and Export Promotion Agency), the Department for International Trade, and the Embajada Británica Montevideo.
Presentations by representatives from Embassy of Uruguay in London, the British Chamber of Commerce in Uruguay and Uruguay XXI described the key strengths of the Uruguayan economy and explained the many incentives that make it an ideal hub for companies wishing to enter and trade throughout Latin America.
The main points we took from the event were:
• it was the first country in the world to provide laptop computers to all primary and secondary school pupils, and to all teachers. Smart Cities, Smart Towns and Smart Education concepts are at the heart of schooling. Language skills are good, all teachers have access to English tuition and a significant number of Portuguese speakers helps companies trade with Brazil;
• the country has high standards of transparency, strong institutions and is committed to investment in knowledge: facts I can relate to in my own experiences working in Uruguay;
• income per person is the highest in Latin America and Uruguay’s fifteen straight years of GDP growth far outstrip the performance of its massive neighbours, Brazil and Argentina;
• the country has implemented strategies that make it a very attractive location for companies seeking to establish a hub for goods and services in the region. Examples include excellent internet connectivity, free ports and free airports, no restrictions on repatriation of profits, no discrimination between overseas and domestic investors, unrestricted forex market, single taxation system throughout the country, and slick procedures for setting up a company.
For our part, it is good to see that the Education PPP program, which we helped develop, has recently issued invitations to tender for the fourth bundle of schools.