The Objective of maintaining International connectivity through a strategy is to “mitigate the impact of long distance travel on the local and global environment and to improve the transport network as much as possible”.
Earlier UK has no direct control over long distance rail, coach, air or sea services, to promote the international trade. The International travel strategy offers the most sustainable mode of journey type and transport modes for local and international access
The international travel strategy helps the nation to reduce journey times, and improve frequency, reliability and quality of service. To achieve real growth in the economy, the travel industry needs to reestablish its place and the strategy gives a direction to it.
A National Travel strategy helps the country to:
- Improve journey times and connections to avoid congestion in the travel chain and to improve integration to achieve the objectives for economic growth, social inclusion, integration and safety
- Reduce emissions and to protect the environment quality and climatic changes, balance the air quality to improve healthy economy.
- Improve accessibility, quality and affordability of travel and tourism to provide a better public transport, with more availability, quality in transport services and value for money
UK’s National travel strategy is based around the following priorities:
- Maintenance of safety operations for the existing assets
- Establishing and promoting measures for quality and optimum utility of the, existing capacity through innovative solutions.
- Promotion of necessary, affordable infrastructure
An overview of the transport infrastructure and services sector in UK:
UK’s transport sector can be divided into three main categories:
- manufacture and distribution of transport vehicles, eg trains, ships and their associated parts
- infrastructure projects, eg Air ports facilities, railway building, regeneration and maintenance
- transport services, eg the commercial movement of freight and passengers by road, air and sea
The UK logistics industry including the commercial transport through freight, road, rail, sea and air accounts for 5% of the UK’s gross domestic product and employs 1.7 million people. There is an evidence of rapid growth in the air transport sector. The Department for Transport estimates for 2005 – 2020 states that the number of passengers at UK airports will grow from 229 to 401 million. Within this the commercial goods and marine transport are the major segments for the expected growth besides passenger segment. According to the Office for National Statistics data, “more than 26.6 million passengers, 7 million cars and 555 million tonnes of freight moved through UK ports in 2004” (Office for National Statistics).
The UK’s International transport manufacturing through export sector is constant, with a value of £13.01 billion in 2005. Imports in the same year were valued at £12.07 billion (Office for UK National Statistics).
Key drivers of the UK Commercial traveling sector
UK has a long standing reputation for the quality and expertise in the traveling industry. The Global Railway equipment manufacturing and infrastructure projects are witness for this.
Key drivers for Air freight and passenger transport businesses in UK include the following:
- The UK Travel and tourism industry is more concerned about the environmental efficiency, cost effectiveness and fuel efficiency.
- Expanding and improving the UK international trade
- Safety of vehicle, passenger and vehicle from the possible climatic calamities and terrorist attacks.
PPP
However, to have an adequate international travel strategy and to execute it effectively, a country needs to raise funds either publicly or privately. Across the Globe, the Public Private Partnerships (PPP) is gaining popularity to improve the country’s infrastructure. PPPs take concern about building infrastructure assets or maintaining the existing layouts. According to some authors, PPP doesn’t necessarily involve financing, but design-build-finance-operate arrangements. An increasing number of countries are interested to implement and administer PPP, including U.K. This sometimes can be implemented in the form of micro finance or Private Finance Initiative according to the need and necessity. And for the developed countries like UK, PPPs can be said as the economic backbones. A recent study of PPPs in “Europe found that between 1990 and 2005, more than a thousand partnerships had been signed in the European Union alone, representing an investment of almost 200 billion euros”.
Many successful implementing countries like UK became the path makers for many developing countries.
The UK Government’s approach for PPP is to,
- Deliver considerably improved public transport services, by increasing the quality as well as quantity of investment in the sector
- Utilizing the state owned business, in aiming for the optimum utility of the public sector assets, including – providing value for the taxpayer and therefore wider benefits for the economy
- Offering a fair share of the benefits of PPP to the stakeholders – including taxpayers, employees and customers.
Investing through PPP programme in a country’s physical infrastructure can catalyze the economic growth, human welfare and directly reducing poverty by creating employment opportunity.
In UK, though the Government is the major provider of infrastructure services an increasing number of Public and Private Partnership programs are taking a role in the development of infrastructure concept. However, the partner investors in PPP programs are supposed to function according to the Government’s Vision for transport businesses using the national rail and road networks.
The PPP programs aim at the following:
- To help to deliver a number of major infrastructure projects.
- Offering expertise and fund to the UK transport network on behalf of UK Government especially through UKTravel and tourism Ministers
- To deliver improved services by establishing a centre of excellence with the right professional skills in travel and tourism industry
Transport Scotland
Transport Scotland is a form of PPP working for Scottish Ministries and functioning according to the national transport strategy. Hence, ‘Transport Scotland’ is accountable to Scotland Parliament as well to the public. Transport Scotland works as an alignment of government, local authorities’ and private sector transport operators. In order to clear the transport problems of the Scotland, the PPP is formed as a network with seven regional transport partnerships (RTPs) and works under a strategic view of national strategy.
The agency of Transport Scotland was launched in January 2006 and is made up of the following six directorates. They are:
- Directorate of Rail Delivery
- Directorate of Strategy & Investment
- Directorate of Major Transport Infrastructure Projects (MTRIPS)
- Directorate of Trunk Road Network Management
- Directorate of Finance & Corporate Services
- Directorate of Business Improvement
The PPP of the Transport Scotland is responsible for the following:
- Coordination and execution of the National Transport Strategy for Scotland
- Networking with regional transport agencies and administering for funding.
- Striving for sustainable transport by observing travel safety and improved accessibility
- Policy making for local travel connectivity
- Policy making and execution of different means of traveling like rail, bus, freight
- Optimum utilization of travel connectivity with ports, harbors and ferries.
In the United Kingdom Public Private Partnerships (PPPs) have changed the style of public service and brought modernization in the UK government’s working style, leading to the British Government’s economic growth strategy.
Reasons for successfulness of PPP in UK?
During 1980s UK faced many problems with public procurement and public service delivery. The conflict between contractors and the public sector sponsors lead to poor performance with cost and time overruns.
However, the UK’s programme of privatization of large-scale infrastructure such as power, water and transportation influenced expertise of Governments functioning in the public service.
The private finance initiative (PFI) in the UK involves the public sector working in co-operation and partnership to provide infrastructure and services. In order to assist confidence levels in both the private and public sectors the UK Government recognized the need for a systematic and ‘top down’ driven approach to generate a momentum in PPP projects. This was capitalized as Partnerships UK (PUK). PUK is nothing but the PPP itself with 51% of shares owned by the private sector. UK, being the PPP leader has closed over US $76 billion of PPP projects. About 50% of the total spend has been in the Transport sector with nearly 45 projects.
Advantages of PPP
PPP has provided a number of benefits compared with conventionally procured public sector projects.
- Service Improvement: PPP allows the competitive tendering which in turn allows the powerful incentive for innovation and gives the winning team a mandate for change and the responsibility to prove;
- Strengthening of Infrastructure: Infrastructure utilities like – power, water, telecommunications and transport systems can be provided quickly, efficiently and effectively than the traditional state counterparts.
- Better Mobilization of Capital: Accountability and reinvestment of funds by the private sector makes the utilization of the funds more proper.
- Value for Money: The integrated design and construction results in cost reduction and better value for money.
- Transparency of finance: PFI model restricts the places to hide the over expense leading to much transparency.
- Provision of great buildings and services that would otherwise not be available: PPP-PFI programs have invited major constructions like air gateways, security checks, provision halls etc.,
- Innovation: The threat of competition and the desire to stand ahead of the competitors will lead the PPP agencies to adapt significant innovation while learning the organizational culture, design and construction and technology.
- Elimination of cost overruns: PPP contract structure encourages efficient and timely completion by keeping a hold on the payments of private sector by the authoritative public sector..
Maintenance of assets to a high standard:
- International quality standards and the market demands drive the need to maintain high standards with PFI projects.
- Airport infrastructure: The Airside services like airfield, gates, air bridges, and all facilities associated with the movement of aircraft. All facilities considered beyond the passenger security areas (runways, taxiways, aprons, etc.).
However, some of the cautions that should be taken care for the success of PPP involve the following:
- PPP contracts should not be entered just for the sake of undertaking a PPP project.
- A detailed costs and benefit analysis should be performed with the private sector that is to be involved to ensure that a PPP enhances the public benefit.
- The level and degree of private involvement should be controlled to match the objectives and needs of the project and the public.
- PPP structure should be carefully designed to appropriate the factors like cost and ability to smoothen the implementation.
Cases of PPP in UK Travel Industry
Edinburgh’s freight movement by rail
An Air Transport Forum has been established for Edinburgh Airport, and has established a surface access strategy. This Forum has two sub-groups, considering improvements to Infrastructure and Information. BAA works with this Council and Lothian Buses plc to establish a Quality Partnership covering the bus link. The Council is represented on this forum and supports its efforts to improve the attractiveness of more sustainable surface access to the airport.
Navcanada Air Traffic Control PPP
The Navcanada Air Traffic Control is a success example of UK PPP programs. The program is aimed to provide air traffic services in Canada. The PPP Concessionaire involves Navcanada (Crown / trust corp.) The project is worth of ~ Euro 600 million. The major issues with the PPP project are to have strong predictable cash-flows, to keep hard currency revenues, to have non-Government interference, to have private sector management regime and to have off balance sheet.
Under PPP program, UK Government wanted to reform NATS to have sufficient funds for capital investment, to fulfill the following objectives:
- Maintenance of national security an safety standards. Separately for service provision from safety regulation
- Improved project management skills
- To exercise greater freedom to invest and to improve its services free from public sector constraints
- Safe guarding of the tax payer while achieving the national benefits.
As a result of this PPP program, the Air traffic system is able to survive through the commercial impacts of 9/11 terrorist attack.
References
- Stuart Wilson, Strategic Transport Projects Review.
- Transport, transport infrastructure and services.
- Steve Jhonson, Transport & PPP.
- John F.White, International Air Transport Association.
- Air Transport Infrastructure: The Roles of the Public and Private Sectors.
- What are Public Private Partnerships? Web.
- Public Private Partnerships in Infrastructure, A brief overview of DFID Programmes of Support.
- Nigel Evans & David Campbell, Strategic Management for Travel and Tourism: Prentice Hall.
- Overview of Public Private Partnerships in the UK,. Seminar: Financing Infrastructure.
- Dr Neil Bentley, CBI Public Services Forum ‘Going global: the world of public-private partnerships.
- T.M.Blaiklock, PUBLIC – PRIVATE PARTNERSHIPS [“PPP”].
- How to access UK expertise in Public Private Partnerships: A brief guide from UK Trade and Investment 2004.
- UK and International Connections.