Building for Brexit

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Highlights

  • The UK is Ireland’s biggest two-way trading partner, with trade between the countries estimated to be worth more than €60bn a year
  • The Irish government’s Project Ireland 2040 scheme outlines a number of infrastructure projects that could help the country meet the challenges posed by the UK’s departure from the EU
  • Projects include a €230m redevelopment of Alexander Basin at Dublin port, construction of the M20 motorway between Cork and Limerick, which will cost €900m, and the €550m Galway ring road

 

Brexit will have a huge impact on the Irish and UK economies, which means it’s essential the necessary infrastructure is in place so trade between both countries keeps flourishing.

The cultural and social links between Ireland and the UK go back a very long way – and their economic links are just as strong.

According to the British Irish Chamber of Commerce (BICC), the UK is Ireland’s biggest two-way trading partner: it’s estimated the trade between the countries supports 400,000 jobs and is worth more than €60bn annually.

Meanwhile, figures from the Central Statistics Office have revealed that the value of goods exported from Ireland to the UK rose by 8% to €14.5bn in 2017, equating to 11.8% of the total value of goods exported.

 

Route to Europe

The UK also serves as the main route to European markets for most Irish businesses, with more than 80% of Ireland’s trade with mainland Europe transiting as road freight via the UK. The majority of these goods are either in perishables or other time-sensitive products such as pharmaceuticals.

The UK’s decision to leave the EU – potentially removing access to the European single market and customs union, and leading to tariffs and delay-causing customs checks – could create challenges for trade and that smooth passage of goods through ports, airports and roads.

This is why it’s imperative both Ireland and the UK have the necessary infrastructure in place to optimise and increase the capacity of transport hubs and other supporting assets, such as roads, warehousing, broadband and housing.

“Brexit should be at the forefront of all infrastructure planning,” says Marie Hunt, executive director and head of research at the CBRE Ireland and a member of the BICC’s Brexit subcommittee. “It should shape the speed and type of projects we need going forward.”

 

Infrastructure focus

The BICC’s infrastructure committee believes there should be a clear focus on projects within Ireland to build internal and external investment regardless of the Brexit outcome.

The government launched Project Ireland 2040 scheme in February 2018. Its 10-year, €116bn National Development Plan outlined a number of infrastructure projects including a €2bn expansion of DART to create a fully linked metropolitan network around Dublin, and a €3bn light rail line between Dublin airport and the city centre. There will also be a €230m redevelopment of Alexander Basin at Dublin port and a second parallel runway at the airport.

The government also plans to bolster regional development with the construction of the M20 between Cork and Limerick, which will cost €900m, and the €550m Galway ring road.

The plan, although primarily targeted at meeting the expected population growth rather than Brexit itself, will nevertheless meet the challenges of change come the UK’s EU withdrawal in March 2019.

 

Ports investment

The BICC believes investing in ports infrastructure is one of the most crucial projects in preparing for Brexit. It says more than 400,000 trucks use the Dublin-to-Holyhead route every year to transport exports to the UK and on to Europe. If customs checks were imposed following the UK’s EU departure, it’s estimated the queue of trucks would stretch to 9km between the hours of 5.30am and 7.30am. This would require an extra three hectares of space to be found to allow the customs checks to take place.

 

“Brexit should be at the forefront of all infrastructure planning. It should shape the speed and type of projects we need going forward”

Marie Hunt, Executive Director and Head of Research, CBRE

 

Hunt envisages that there will also be a need for more warehouse and distribution infrastructure around ports, airports and the M50 orbital. “If there are customs checks, that will lead to delivery delays,” she warns. “You could see UK retailers deciding to move to local distribution in Ireland and building supply-chain facilities, especially if they’re moving perishable goods. Having those products sitting in vehicles during delays could be detrimental to business. Distribution models will have to be changed.”

In a similar vein, Hunt is calling for more investment in office, commercial and private housing infrastructure in the event of UK firms opening offices or relocating headquarters to Ireland after Brexit. “We’ve seen an increase in planning applications. Many UK firms are saying that Dublin is their preferred choice post-Brexit,” she explains.

However, the BICC recommends national transport links be upgraded to promote a better-balanced regional development that’s not just focused on the capital. With that in mind, it believes a fast-track rollout of the National Broadband Plan should be a priority.

“In the past, National infrastructure plans from government tend to focus on Dublin, so the new National Development Plan is unusual,” says Hunt. “Brexit will have a significant impact on rural locations outside of Dublin, so we need to focus on improving infrastructure – such as road networks between cities, broadband, and universities and colleges – to develop jobs.”

 

Seeing it through to the end

To support such projects and ensure long-term success, the BICC wants to create an independent statutory National Infrastructure Commission, operating on a 15- to 20-year time frame. “We need an implementation committee to oversee projects and see them through to fruition,” says Hunt.

It’s already identified the need to upgrade the Dublin-to-Belfast rail service, advance the electricity interconnector between North and South and provide heavy rail access to Dublin airport linked to the Dublin-to-Belfast line.

 

A hard border

Clearly, a Brexit resulting in a hard border between North and South is something both the Irish and UK governments are keen to avoid. Solutions such as camera technology that can replicate physical custom checks, or even Northern Ireland remaining in the customs union, have been aired. Whatever the final outcome, infrastructural improvements between North and South are crucial.

Stronger Ireland and UK links are also needed. The BICC wants a complete review of the capacity of ports in both countries and a formal UK-Ireland Transport and Infrastructure Forum to be created to address areas of mutual concern surrounding Brexit.

It’s an uncertain period for businesses in both countries. However, planning and investment in infrastructure can help them maintain valuable trading links and ensure they will continue to grow in the future.

By ContentLive

 

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Tuesday, 18 September 2018
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