By Claire Ferris-Lay
Aviation, roads are prime areas for foreign investment, says British minister Mike Penning
The UK would welcome further infrastructure tie-ups with Dubai’s state-run companies after DP World’s multibillion-dollar investment in the London Gateway project, Britain’s Under Secretary of State for Transport said.
Investment in aviation and roads infrastructure would be not only help shoulder the burden of funding but would help to boost confidence in the UK economy, Mike Penning said.
“We are looking for investment. The more joint partnerships and the more outside investment people see coming into the UK, the more confidence there is in the UK economy…If banks are not willing to lend and invest then people ask why they should invest,” he said.
“Transport is an obvious [area for investment], as an example, our motorway infrastructure. These are difficult times in the UK; I’ve got a budget but not an enormous budget.”
Dubai’s DP World, the world’s third-largest port operator, is spending billions of dollars on the London Gateway development. The port, which is located around 40km east of central London, is set to become Europe’s largest logistics part and will create 36,000 jobs.
DP World, which listed on the London Stock Exchange earlier this year, on October 4 said it would invest a further $1bn on the project over the next three years, having already spent $600m.
Penning said the project would transform Britain’s maritime port infrastructure, boost jobs and become a catalyst for future investment.
“To say it is important would be a massive understatement, it’s by far the single biggest investment we’ve had in the UK ever [and] it’s a catalyst for a regeneration of part of the country,” he said.
The UK is also unconcerned about the rapid expansion of Gulf airlines into the competitive long-haul market, which has unnerved many legacy airlines and fuelled accusations of protectionism, Penning said.
“The aviation industry is a significantly difficult sector and all governments around the world always try to control the market. But we are in a world economy and in a world market and we don’t have any nationalised airlines in the UK, so I think that probably answers [whether or not we would block landing rights],” he said.
Canada’s transport agency last year denied Etihad and Emirates fresh landing slots, sparking a widespread diplomatic row between the two countries. The chief executive Air Canada last year accused Dubai-based Emirates of wanting to “flood” the market.
The Gulf state retaliated with the closure of Camp Mirage, a secret military base located outside Dubai and used to supply Canadian troops in Afghanistan. In December, the UAE Embassy announced Canadian citizens would no longer receive free visas. Instead, tourists must now pay up to $1,000 Canadian dollars to enter the country.
European airlines are also concerned about the impact Gulf carriers will have on their operations. The secretary general of the Association of European Airlines, Ulrich Schulte-Strathaus, in February suggested Gulf airlines were run as part of a national strategy and a “vertically integrated economic chain.”For all the latest banking and finance news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.