Growing border economies through infrastructure
SONI hosted a round table discussion in Armagh examining the importance of infrastructure investment in growing the border economy.
What are the main challenges for the border economy?
Richard Kirk
Brexit is casting a cloud not only over the border economy but also over north-south trade and the movement of people. Within our sector concrete production is often a cross-border undertaking, with aggregate crossing the border for processing. The movement of people and services is important. With the strong growth in the Republic’s economy some contractors now have up to 80 per cent of their turnover outside Northern Ireland. Brexit brings a lot of uncertainty for the border economy.
Colm Shannon
Uncertainty is the key word for Brexit. It is a significant concern for the businesses I represent in terms of trade and commerce in Newry. We need clarity around what is happening as our businesses need to plan. Some of our bigger businesses can put contingency arrangements in place but it is really challenging for smaller firms. There are also challenges around the cost impact of Brexit. There is much talk of trusted trader schemes and of mobile customs, but this strikes us as more bureaucracy and allegedly leaving the EU was about getting rid of red tape. We want to ensure our businesses remain competitive and can trade north-south and east-west and beyond that – we have a couple of global companies in Newry. Because of our closeness to the border any changes in how companies operate in the south compared to the north is important, particularly around the movement of labour.
“The North South Interconnector is a priority. It is a significant investment that will help not just the border economy but the wider economy.”
Olga Murtagh
There are a number of issues businesses have raised with us, including digital connectivity especially in rural areas. The lack of access to broadband is a significant impediment for businesses. Road infrastructure is also an issue. We are sitting in Armagh today and plans are not being progressed for the east and west link roads around the city. We need to effectively manage traffic around this beautiful Georgian city. Land available for zoning for economic activity across the Borough is another challenge, as is ensuring a balanced regional approach to economic activity. The availability of talent and the skills sets needed to ensure business continues to operate and to grow is a pressing issue.
Robin McCormick
Some of the challenges we see arise as a result of the renewable energy initiatives. There has been a target, both north and south, for 40 per cent of electricity from renewable sources by 2020. That has initiated a huge amount of commercial activity with a lot of it in the west and in border areas. The challenge has been to develop that without border restrictions. This was achieved by operating license requirements for SONI in the north and EirGrid in the south, to take into account the infrastructure requirements on the other side of the border. That has led to a lot of efficiencies in the development of large scale wind farms. We are on target to meet the 40 per cent. For example, today we have a system demand of 4,863MW and 3,231MW comes from wind. This removes carbon from the power supply and puts downward pressure on prices. That’s a good news story where there is tangible cross-border co-operation to help both economies.
There are many good examples of border businesses that have done tremendously well but they had to have the energy infrastructure support to achieve that.
“Anyone with a business proposition between the start and end of the interconnector can put in an electrical junction and create an opportunity.”
Robin McCormick
What infrastructure investments offer the potential for greater cross-border employment and trade? What can be done to improve transport infrastructure?
Richard Kirk
When considering infrastructure for improving cross-border trade and employment, we need to look back to see where we have come from in terms of digital connectivity and what that might look like in the future. ICE has undertaken some thought leadership research on the future of work. With digital connectivity increasing we may not need to travel as much for work as in the past and that will impact on the demand on our transport networks. Teenagers are not travelling as much now as their connection with peers is mostly digital. Technology is shaping the way we use physical infrastructure, therefore linking the economies on the island is critical both in terms of digital connectivity and the speed and capacity of the Belfast to Dublin rail line. Translink has a paper looking at the different options for the rail line but in the absence of any funding it will only be a pipe dream.
Colm Shannon
That highlights the need for Brexit mitigation measures as the last upgrade of the Enterprise was delivered through EU funding. Young people travel less with the rise of digital, but there is still a dearth of investment in infrastructure, and to bring our road network up to the level of the rest of the UK or that of the Republic of Ireland. For Newry, it was good to hear the recent announcement from the Department for Infrastructure about the southern relief road to start by 2023. This is vital for the economy of the Newry area and also for cross-border trade because it gives access to Warrenpoint Port. It will help the economy of the city of Newry and support tourism in South Down. Newry is part of the Belfast City Region deal and we look forward to the announcement of up to £1 billion investment in the region, including some support for the project.
Olga Murtagh
When considering major infrastructure improvements, it is important to think of Northern Ireland PLC as a whole; not just north south but east west. We should consider: is the balanced economic development across the region? And where are the projected areas and sectors for growth?
The rail link is important as Portadown is a major connection on the Enterprise route. Translink have recently invested in its Park and Ride facility at Portadown as passengers from the south and mid-west of Northern Ireland access the Enterprise at Portadown. We also need to ensure any major road improvements are not considered in isolation and should support areas of growth.
Robin McCormick
Planning approval is a key issue for major infrastructure projects. Much of the focus has been on funding but there are a number of significant projects now stopped because we have no momentum in decision-making. We need the Executive back together and making those decisions that will improve the economy, the border economy and all our lives. Although there has been criticism about delivery in the past, there has been progress. For example, the Strategic Energy Framework drove the 40 per cent renewable energy target and supported it with a mechanism for emerging renewable energy technologies. We have seen a huge amount of infrastructure put in place because of that. We can do it but at the moment there are a number of important infrastructure projects stuck and we can’t get them moving.
How important is energy infrastructure in underpinning the island’s energy security and sustainability?
Robin McCormick
Infrastructure is a big investment that has a lifetime’s impact. It is around for 30, 40 or even 60 years. In the electricity sector it is not just a case of ‘we will need more infrastructure?’ Customer’s needs are changing and the way they live is changing. That will change their energy needs. We have introduced a concept called ‘Tomorrow’s energy scenarios’ to open a conversation about what our future might look like. What are our lives going to be like? And how will that impact on our energy infrastructure? Are we going to have a lot more electric cars? Are we going for further decarbonisation? It may be that we don’t need a huge amount of infrastructure but need a huge amount of data management. We may see more control of appliances via smartphones and this will mean a different way of managing power. If we have a lot of electric vehicles with big batteries in them, when they are plugged in they will either be taking electricity or have the potential to put electricity back into the system. In the next 5 to 10 years we will see a transition in the way we live and that will impact on some of those bigger investment decisions
“Linking the economies on the island is critical both in terms of digital connectivity and the speed and capacity of the Belfast to Dublin rail line.”
Richard Kirk
Richard Kirk
In personal mobility there are lots of possible changes. The use of hydrogen could change everything or will electric win-out? In terms of energy security, the North/South Interconnector brings many benefits including increased capacity on the grid, increasing renewables, reducing carbon and lower cost to the consumer. Energy and waste are also interrelated. Northern Ireland exports a large proportion of non-recyclable waste. As this can’t go to landfill, this waste is exported to other jurisdictions that have gasification or waste-to-energy plants. We are literally exporting jobs to other countries because we can’t get our heads around the politics of this technology. The lack of an Executive has delayed the arc21 project which would provide waste-to-energy facilities in Northern Ireland. We need to understand that waste is a resource and we could keep it in a circular economy and create jobs here.
Colm Shannon
We need access to reliable and competitive energy that allows businesses to plan for the future. The all-island energy market is crucial in that respect and the North/South Interconnector is an important aspect of that.
“The major infrastructure project we would like to see delivered is the southern relief road for Newry, commencing by 2023.”
Colm Shannon
Olga Murtagh
In this area advanced manufacturing, agri-food, life and health sciences and the digital economy are all very important areas of economic activity. Energy is important in supporting that business growth and is also important from a residential perspective. The councils are preparing local area development plans and these should reflect some of this forward planning around energy use and all of us involved in spatial planning should look to consider more innovative ways on providing energy.
Robin McCormick
If we don’t invest in crucial infrastructure we are wasting money. We have just brought in a new wholesale electricity market that went live on 1 October. This is designed to put downward pressure on prices and to make trading on interconnectors more efficient. That will bring benefits to the whole of society and we are wasting those benefits by not investing in the North/South Interconnector. It has planning approval in the south and planning approval in the north. The recent technical reports commissioned by the Irish government supported the overhead line technology which will be used for the project. It is vital to see it delivered.
What other areas are important for the border region economy? Tourism, health services, education and skills, agriculture etc.
Colm Shannon
Health has demonstrated how north south co-operation can work to improve services. For example, the new cancer centre in Altnagelvin wouldn’t have been viable just for Northern Ireland and the partnership between the Royal Victoria Hospital in Belfast and Dublin for paediatric heart care is a real example where economies of scale made it sensible to work together.
Olga Murtagh
There has been significant investment through the EU regional Development funds and through Interreg. Cross-border partnerships, such as the East Border region and ICBAN, have worked effectively in this locality. Another strength of this area is in the logistics and distribution sector. We have major hauliers located here because of the ease of access to motorways and ports. We need to continue to support their needs.
Richard Kirk
Tourism is one area with a lot of potential for co-operation. Northern Ireland has a ‘greenway’ strategy which takes abandoned railway lines and brings them back to life. The Republic has done a lot of work in this area and the economic benefit is fantastic, with hotels and coffee shops popping up along the routes. It is a real draw for families, travelling around Ireland on their bikes. Just imagine 500km across Northern Ireland at a cost of £150 million. That offers real value.
Robin McCormick
There is now lots of evidence of the economic benefits of increased tourism with the growth in the number of hotels across Northern Ireland. We have seen the numbers of people going to attractions that when they were built some were sceptical about their viability. I had a ‘daddy and daughter’ day at the Gobbins. It was a fantastic facility. On health and education there seems to be a huge amount of infrastructure already in place and the debate is how do we use that better? Do we have too many individual schools? That’s a debate we haven’t got to and it requires our political leaders to stand up and facilitate that debate and then come to a considered conclusion and implement it.
Colm Shannon
The retention of the A&E in Daisy Hill hospital in Newry was down to community leadership. All parts of the community, businesses, the voluntary sector and ordinary people made the case for retaining and developing that service.
Olga Murtagh
We are sitting in Ireland’s oldest city, which is also the ecclesiastical capital of Ireland. We have to support the hospitality and tourism sector for further growth. The recent announcement by HBO that the Game of Thrones studio tour is going to take place in Banbridge was very welcome and we need to support any investments around that.
Colm Shannon
There is also a skills agenda to support that growth in tourism. We need to ensure we have the right people to fill those jobs. Recently in Newry, a number of businesses have announced plans to recruit new staff. This is a challenge as we are in a very competitive environment for people, with Newry sitting in a location where people can take advantage of employment opportunities in the south. We need to get our young people skilled to be able to take up these opportunities.
“In terms of infrastructure it would be digital connectivity; that’s the feedback we get from businesses.” Olga Murtagh
Olga Murtagh
The Southern Regional College has a £90 million expansion plan with a new campus well underway in Armagh and its Banbridge campus has now a focus on digital and multimedia. We need to help young people think about what the jobs of the future will be, some of which haven’t been identified yet and link skills to industry requirements.
Outline the priority investment area for the border economy
Robin McCormick
The North/South Interconnector is a priority. It is a significant investment that will help not just the border economy but the wider economy. It allows for business expansion, both north and south. It harvests a lot of wind energy by giving greater flexibility between north and south and that brings about all the benefits of decarbonisation. There are a host of benefits including flexibility. Anyone with a business proposition between the start and end of the interconnector can put in an electrical junction and create an opportunity. That’s much more difficult if you use different technology. We want it to be as flexible as possible and to deliver the benefits to the economy and to help develop the border area.
Olga Murtagh
We need to play to the economic strengths of the area and ensure that businesses continue to grow and develop. We need to see how we can help the private sector grow its GVA currently in this locality its £3.6 billion and we need a policy framework that delivers balanced regional economic development. In terms of infrastructure it would be digital connectivity; that’s the feedback we get from businesses.
Colm Shannon
The major infrastructure project we would like to see delivered is the southern relief road for Newry, commencing by 2023 and funded as part of the Belfast City Region deal. The Executive coming back is important. Newry sits on the economic corridor between Belfast and Dublin and we need to see the Executive working with the Irish government, particularly with Ireland’s 2040 development plan.
Richard Kirk
Increasing the flow along the Dublin-Belfast corridor is key. Although digital is becoming more and more important, people will still want to move up and down between Belfast and Dublin. If we could increase the capacity on the Belfast-Dublin rail line that would supercharge our economy by connecting with one of the fastest growing economies in Europe.
Participants
Colm Shannon
Colm Shannon was appointed Chief Executive Officer of Newry Chamber of Commerce and Trade in September this year. Prior to this Colm worked in the public sector for more than 38 years. He was Director of Executive Support and International Relations for the NI Executive from November 2016 to January 2018. Before taking up this position he was Joint Secretary of the North South Ministerial Council and before that Deputy Director of Communications for the Executive Information Service (EIS) within the Office of the First Minister/deputy First Minister.
Richard Kirk
Richard Kirk is Regional Director, Institution of Civil Engineers (ICE) and helps civil engineers explore how they can deliver social value through infrastructure. As ICE Regional Director he is responsible for working with around 2,000 members. Prior to this he worked with the multinational consultancy AECOM, responsible for the delivery of capital infrastructure projects in Northern Ireland and the Isle of Man. Richard is a Fellow of ICE, Chartered Manager and holds a MBA. He is the Chair of ClimateNI, a member of the W5 Redevelopment Advisory Group and was Chair of the NI Construction Group in 2017 and was previously a Non-Executive Director of Colleges NI.
Olga Murtagh
Olga Murtagh is Strategic Director (Place), Armagh City, Banbridge and Craigavon Borough Council. Her remit involves overseeing the areas of Economic Development, Tourism, Arts and Culture and Urban and Rural Regeneration. As a member of the Council’s Executive Management Team Olga is responsible for providing leadership and strategic direction in relation to the Council’s economic, social and physical agenda. Olga has worked in a number of local authorities and has significant experience in the areas of economic growth and regeneration.
Robin McCormick
Robin McCormick is General Manager of SONI Ltd. He is also Director of Operations, Planning & Innovation of EirGrid. Robin previously held the role of General Manager of the Single Electricity Market Operator (SEMO) and has significant experience in the power industry in a regulated utility environment. He is a fellow of the Institution of Engineering and Technology, Fellow of the Institution of Civil Engineers and Fellow of the Institute of Directors. Robin holds an MBA from the University of Ulster, Jordanstown, and an MSc from Napier University, Edinburgh.
