Utility Week

UTILITY WEEK | 1ST - 7TH NOVEMBER 2019 | 7 Interview S ir John Armitt is the nearest the engineering profes- sion has to a national treasure. Rail, nuclear, the London Olympics, there's not much in transport, building and utility infrastructure that he's not built, delivered, or sorted out in some capacity in his 50-year career – including just latterly a plan to shape the role of regulators to help meet net zero targets and safe- guard long-term water supply. Heck, he's even hoofed with aplomb to the Pharrell Williams song "happiness" for a video made to promote careers in civil engineering (worth a watch). Combined with his smooth diplomacy, PR skills and clarity of vision, the chair of the National Infrastructure Commission (NIC) is a round peg in a round hole. But like everyone else in Westminster and the coun- try at large, at the time we meet in the basement café of the Institution of Civil Engineers where he's a past presi- dent, Sir John is in limbo, waiting to see whether Brexit and a general election is about to scupper the govern- ment's long-awaited response to the NIC's blueprint for infrastructure. He wasn't expecting any answers from a meeting with his bosses over the road at the Treas- ury straight a"er our interview. But who knows if he got the heads-up. Days later, as we went to press, Sajid Javid announced that the 6 November budget had been scrapped, and presumably with it government plans to issue the national infrastructure strategy, which is the government's formal response to the national infrastruc- ture assessment (NIA). Waiting is the name of the game these days. The NIA was unveiled more than 12 months ago – so response time is already more than double the norm. "If and when it happens, it'll be the first time the government has said: 'Here is a long-term national infrastructure strategy.' That will a big day." Crucially, the government's NIA response would also provide the strongest signal yet of just how much ability the NIC has to loosen the Treasury's purse strings, and for utility companies it would offer a crucial litmus test of the organisation's clout. The NIC is still a relative new player in their orbit. In his role as chairman of the Olympic Development Authority, which delivered the regeneration and ven- ues for the London 2012 Games, success for Armitt was either black or white. But what form might it take at the NIC, which he has chaired since December 2017? "Suc- cess for the NIC is that our recommendations get picked up by government. So far, we've made 45 large-scale recommendations, and of the 45, they've accepted 42 in principle." What it now needs, he says, is the money and the pol- icies to turn these "warm words" into deliverable action. "What they have to be careful of is not delivering a nice souffle, when everyone is looking for a steak pie," he says and smiles wryly. That steak pie would include a commitment of £43 billion over the next 20 years to the largest cities in the UK so they can plan and deliver their own infrastruc- ture. "There has been quite a lot of talk recently about devolution, but you can't just give political devolution without funding. The money is the important thing." There's plenty more requests for a meaty filling: "We'd like to see a greater commitment to EVs [electric vehicles], and the infrastructure required to support EVs. That requires more direction from government to the regulator, so the regulator can then sit down with the distribution companies and work out a way to upgrade the distribution network and provide sufficient power. Because it's going to need fast chargers – people aren't going to be interested in sitting at a petrol station for an hour." In utilities, there are already areas where NIC assess- ment recommendations have been taken on board. As he points out: "The Environment Agency and the water companies are in full agreement with us about the need to reduce leakage in all systems by 50 per cent by 2050, and the need to build more water capacity, by water transfer schemes and also extra storage. "Coming up with a new energy policy is difficult. We've argued that the future, by 2050, can actually be no more expensive to the consumer if it is fundamentally a renewables policy, and with very little nuclear." Unlike the government, he wouldn't boycott onshore wind. "If people are prepared to accept it, it's the cheapest form of renewables there is. And therefore we would like more freedom for onshore wind to be deployed." The NIC and BEIS [the Department for Business, Energy and Industrial Strategy) are also at odds on nuclear. Sir John and his team have said there should be no further new stations a"er Hinkley Point C, at least for the moment, and he is certainly not convinced by the so-called regulated asset base model (RAB) that BEIS has been consulting on. It might make it more palatable for investors, but it won't sweeten costs for the consumer. "The RAB gives investors a guaranteed return. But the government is going to have to take some of the capital cost risk itself, and if that capital cost risk is realised, then the consumer pays. "So it's very difficult for EDF, or anyone else, to plau- sibly say the next one's going to be cheaper. If you look

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