Calls for private arbitration to avoid delays to transport projects

Monday, July 3, 2017
School

Calls have been made for a new system of private arbitration to avoid costly delays to national infrastructure projects.

Nuno Gil, Professor of New Infrastructure Development at Alliance MBS, says under the present system major transport schemes are often prone to lengthy planning delays as a result of disputes between local authorities and Whitehall going through lengthy parliamentary battles.

He says although there is a clear role for Parliament in pushing through compulsory purchase orders and compensating residents who are affected by infrastructure projects, disputes between central and local government need to be handled differently.

Said Prof Gil: “There are often disagreements between councils and central government about what the overall vision of a project should be. While defending the right of councils to object to proposals and assemble their case, the issue here is that they invariably end up petitioning Parliament to resolve planning disputes, a move which is both costly and causes delays. There is a lot of gaming going on which can be very disruptive and protracted, yet this is an outcome that the disputants do not actually want.”

Arbitration

Instead Prof Gil, whose own research has been looking at the organisational design of major infrastructure schemes, says evidence has suggested that independent arbitration similar to what is observed in strategic alliances leads to much better outcomes in such disputes.

“We can improve the system by involving arbitrators that are third party to the dispute, but not to the project organisation, without undermining the democratic process.”

HS2

He says such issues are brought into focus by the proposed HS2 high speed rail link between London and the North.

The first phase of the £56bn link between London and the Midlands is due to open in 2026 while a second Y-shaped phase, taking the line to the North West in one direction and Yorkshire in the other, is due to be completed about 2033.

Although powers to build the second phase of the line were included in last month’s Queen’s Speech, the project has seen heated debate over the exact route of the line in the North and where exactly its main stations should be located. There has also been a well-publicised legal dispute between Camden Council in London and Whitehall over the redevelopment of Euston Station as part of the project.

Added Prof Gil: “HS2 is a perfect case in point of these issues. If we are to accept government evidence, accepted by Parliament, that demonstrates HS2 will open up major opportunities for value co-creation and appropriation by a large array of private and public organizations in Northern cities such as Manchester and Liverpool, we cannot afford to see major planning delays to this project.”

Wider studies

Prof Gil’s call comes in the context of a study by the Institute of Government into new forms of structuring around the infrastructure planning process.

Meanwhile last month Andrew Adonis, chair of Britain’s National Infrastructure Commission, also said there should be no “delay or prevarication” on major infrastructure projects in the context of Brexit and a minority government.