Scotland in China
Renewables Experts from Scotland’s world-leading wave and tidal testing hub the European Marine Energy Centre (EMEC) are to collaborate with their marine energy counterparts from the Ocean University of China (OUC) in Shandong Province. Te OUC, based in the eastern coastal city of Qingdao, has agreed a contract with EMEC which will see staff from the Orkney- based facility assist the university to develop a wave test centre in Shandong. A Memorandum of Understanding has also been signed to foster closer working relationships between EMEC, the university and Qingdao Municipal Science and Technology Commission. Scottish Development International chief executive Anne MacColl said: “Te skills and expertise coming out of EMEC are truly world-leading and SDI will continue to explore the real long-term opportunities partnerships such as these will bring both to Scotland and China.”
Travel
A senior Chinese aviation industry delegation will travel to Scotland early next year to examine direct air routes into the country. Alex Salmond
Beyond the headlines
Cost of infrastructure spending
Alex Neil, Scotland’s Cabinet Secretary for Infrastructure and Capital Investment, last week pledged £60bn in major project spending until 2030. The plan covers 54 major infrastructure projects and 33 programmes, across a range of areas, including schools, hospitals and housing. Each £100m will generate £160m-worth of economic activity per year and support 1400 jobs in the wider economy for that year, he said. The programme includes a dual carriageway
on the A9 between Perth and Inverness by 2025, construction of the replacement crossing over the Firth of Forth by 2016 and rail improvements across Scotland. It also covers next generation broadband (20Mbps download) by 2020 and improvements in health, education and housing provision. But how will these projects be funded? The Scottish
Government said it will “invest within a sustainable financial framework, and not overly constrain our choices in future years. That is why we are introducing
The Eastern Qing Tombs
met senior executives of China’s Civil Aviation Authority and senior airline representatives in Beijing: “As part of our strategy to support economic growth, the Scottish Government is determined to improve our international air connections – to help boost trade and tourism with key global markets such as China,” he said.
Culture A Memorandum of Understanding on culture between China and Scotland was signed committing the governments in Beijing and Edinburgh to supporting greater exchange and collaboration across the arts, creative industries,
a 5 per cent cap on our future revenue commitments related to capital investment projects as a proportion of our expected future annual total DEL budget. These revenue commitments are a combination of existing PFI commitments, future NPD payments and future debt repayments.” It said it welcomed views “on the investment
pipeline ... and will review it in the light of those views, changing circumstances (e.g. borrowing powers) and at each spending review.” As Bill Jamieson observed in The Scotsman: “This grand plan rests on some truly heroic assumptions – that the administration will be able to borrow up to its lofty ambitions; that billions of private-sector money can be leveraged in; and that funds can be prised out of current resource spending in a manner suggestive of the biggest shake-down since Al Capone went into property protection.” In the current climate, funding long-term
infrastructure schemes – both social infrastructure such as hospitals and schools, and economic infrastructure such as transport and waste projects – can be eye-wateringly expensive. Financiers measure the cost of debt financing by the interest rate premium funders add to the Bank of England base rate before agreeing a deal. Before 2008, PFI schemes were being funded for as little as 40 basis points
heritage and national collections. Among the first initiatives was an agreement between Historic Scotland and the State Administration of Cultural Heritage to incorporate into the ‘Scottish 10’ digital mapping project, the Eastern Qing Tombs, east of Beijing in the Hebei Province. Te final resting place of some of China’s best known emperors will be digitally documented in 3-D along with the five UNESCO World Heritage Sites in Scotland and five international sites. Meanwhile, Edinburgh Zoo became the home for two giant pandas.
Whisky A Beijing business unveiled plans to create the country’s largest Scotch whisky sales network – 300 stores in three years. Te Xiamen Spirit Empire retail outlets are buying more than £20m-worth of whisky annually from Scotland. Alex Salmond met Spirit Empire chairman Ding Wei and Stephen Notman, recently recruited by the company as a ‘whisky ambassador’ to work in Scotland representing Chinese sellers. Te development comes a year after the Chinese Government announced it was giving new legal protection to Scotch whisky. China is a key emerging market for Scotch whisky, with exports worth £57m in the last year.
(0.4 per cent) above base rate. Today, the figure is approaching 300 basis points (3 per cent). Trevor Butcher, partner at law firm DLA Piper, is
involved in bringing big infrastructure deals together. He told Building magazine: “So far we’re not seeing deals falling apart. But the supply of finance is getting smaller; we’re seeing a return to the pressure for shorter-term debt and the terms are hardening. Now project sponsors are having to go to a wider pool of banks, because many banks want a smaller ticket, and some could well withdraw before the deal is signed.” Infrastructure deals have an additional specific
problem; banks are increasingly refusing to offer long-term finance for the life of an infrastructure project while pension funds are used to investing in ‘A’-rated assets; typically, infrastructure projects are classified as ‘BBB’ (adequate to meet financial commitments, but more subject to adverse economic conditions). Willie Rennie, the Scottish Liberal Democrat leader,
said: “People deserve answers from the SNP on how independence will affect the interest rates that the Government, business and households will pay. Given that government bonds in Greece and Italy have rocketed in cost, this is the biggest uncertainty hanging over every one of the projects listed.”
12 December 2011
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