Brexit delaying major UK infrastructure projects

LONDON: Britain’s move to leave the EU is delaying major UK infrastructure projects from tower blocks and power stations to new roads and rail lines, construction and services company Kier Group said on Thursday.

Peers such as Capita, Mitie, Interserve and Carillion have all reported tougher trading in their UK businesses since last June’s Brexit referendum.

But whereas most firms have been reluctant to give details, Kier CEO Haydn Mursell highlighted specific areas of weakness as his company reported a 4 percent rise in first-half profit.

Construction contracts for highrise buildings and large office blocks in major cities, as well as public funding and approvals for large-scale road, transport works and power stations are all being delayed, he told Reuters.

“Certainly job starts have gone back on large projects,” he said, adding contracts for the HS2 highspeed rail project had been pushed back by about a year.

“I think Brexit has created a distraction for government,” he added.

However, Mursell said the market was still buoyant for repeat public sector work, as well as smaller deals with an average value of about £10 million ($12.5 million) — where Kier’s regional business does a lot of its work.

Helped by this, Kier said its order book stood at about £9 billion at the end of December, up from 8.7 billion at the end of June.

This means the company has secured 100 percent of its forecast revenue for the year ending June 2017, and about 70 percent for the next financial year, it said.

Kier’s first- half underlying operating profit rose to £56.5 million from 54.4 million a year earlier.