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Britain to leave the EU; the rail industry responds.

Posted by Luke Upton on Jun 24, 2016

EU and UK Flags With the United Kingdom voting to leave the European Union by a majority of 52% to 48% and the announcement from Prime Minister David Cameron that he will step down in October a shockwave has been sent through the both society and business across the UK and Europe. 

SmartRail World spoke to 35 rail professionals prior to the referendum and that sample indicated that the rail industry would be voting to remain, but with the public having spoken negotiations will soon begin for the UK to end its 40+ year membership of the European Union. Of course, the full implications will become clear over the coming weeks and months. And a considered approach by all would be advisable but with a period of uncertainty ahead we gauged the first reactions from the rail industry…

Eurotunnel

Eurotunnel ( @GroupEurotunnel ) has confirmed its commitment to facilitate exchanges between the UK and France and as a motor for development between the UK and continental Europe. The Channel Tunnel is an important element in the supply chain between the UK and continental Europe. 1.5 million trucks cross between the UK and the continent via the Tunnel each year.

A statement reiterates that the result of the referendum will not affect the activity of the Channel Tunnel Concession. The Channel Tunnel was established under the binational Treaty of Canterbury signed 30 years ago by the sovereign British and French government. Whilst the United Kingdom has never been part of the Schengen area, people and goods travelling through the Channel Tunnel will remain subject to current border control procedures (UK Border Force, French Police Aux Frontiers and Douanes).

Jacques Gounon, Chairman and Chief Executive Officer of Groupe Eurotunnel SE stated: “The Channel Tunnel fixed link was established with an international treaty between two sovereign states. Our Anglo-French vocation is to offer our customers a constantly improving and more competitive transport service. I am confident that we will achieve our goals”

Major Projects

Patrick Flaherty, Chief Executive – UK & Ireland, AECOM ( @AECOM ): “As the country faces a period of change and uncertainty, business must play a stabilising role. A positive, long-term focus on the future is required despite a referendum result that we and many businesses did not want."

"It is critical that the domestic agenda is not sidelined as the UK faces a minimum of two years of negotiations to leave the EU. Focus must remain on energy security and energy independence, as well as progressing the UK’s ambitious infrastructure pipeline. Schemes such as HS2, Crossrail 2 and the Northern Powerhouse programme are vital to the country’s ability to compete on a global stage, which is more crucial than ever due to this referendum result.”

Brexit and rail

Infrastructure

Malcolm Bairstow, EY UK ( @EY_UKI ) Infrastructure Leader, commented on the result: “With infrastructure so crucial to the UK’s growth ambitions, there will now be nervousness. There is likely to be a period of uncertainty which may impact decision-making around projects and overseas investment while details are thrashed out between the EU and the UK government.

The industry may face challenges in exporting skills and expertise in engineering and consulting services if the pound weakens and if there are barriers to the European market.

A significant proportion of the UK’s builders and construction labour is sourced from Europe and there will be uncertainty over what happens next. If we start to see a movement of these workers out of the UK, this would inevitably cause a slow-down in construction and house-building which could also have a significant impact on development across the country.”

The Digital Railway

Speaking to Construction News the day before the referendum, Network Rail chief executive Mark Carne ( @networkrail ) stated the “biggest impact” Brexit would have on the country’s rail operator would be its ability to push forward plans to fully digitise signalling systems. He also added that he personally felt Brexit would mark a “sad day for the country”.

Project Procurement

Partner and regulations expert, Laurence Gavin at Irwin Mitchell ( @irwinmitchell ) law firm highlights the potential importance of UK judges over the coming months to pushing back against European measures in procurement and competition cases.

“Much of our economy is subject to regulation, and most regulations are EU-driven, so uncertainty is going to influence corporate decisions and we can expect an impact on activity while businesses take advice.  In principle, little should change in the short term, and it may feel like a normal summer slowdown.  Come the autumn, we will see whether the Government has a grip on the situation.  Litigation in areas such as procurement and competition law will be watched closely as it will test the UK judges’ willingness to push back against European measures.”

Engineering Jobs

Stephen Cooper, head of Industrial Manufacturing at KPMG UK ( @kpmguk ) on the implications of the EU referendum results on recruitment: “On the jobs front, there are very real implications to the access to engineering talent. Manufacturers will need to consider their strategy. Firstly in retaining their non-UK workforce, secondly in attracting non-UK based expertise and thirdly, more long term and one for the government to support, in developing talent on a much greater scale than they do currently."

Skill shortages 

David Roster Phillips, CEng MIET MCMI an independent contractor in the rail industry, based in the UK but also working internationally told SmartRaill World today; "The absence of tangible and viable plans from the Brexit group was ignored by the majority of media outlets and the simple majority outcome has been driven by narrow, emotional reaction amongst the electorate rather than appreciation of facts. The rail industry will suffer setbacks and difficulties. Already struggling to address skills shortages, the Brexit process to manage availability of skilled resources isn't going to help - there isn't one.

Foreign investment is going to change dramatically - Chinese involvement will advance rapidly, principally because of financial clout. The consequences require a separate analysis.

In the meantime, the industry will need to keep everything moving whilst the politicians consider what to 'plan'. In reality, there is a precedent for this in the rail industry - companies and individuals have worked in this environment since 1948.

Perhaps this was part of the unexplained Brexit vision - the yesteryear concept. The sensible course of action will be for the politicians to leave it to the railway professionals."


We’ll be updating this page as the day goes on. What do you think?

Email Editor@GlobalTransportForum.com to let us know.

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Topics: projects

Luke Upton

Written by Luke Upton

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