Balfour Beatty UK The Multinational Infrastructure PPP Essay

Length: 6 pages Sources: 5 Subject: Economics Type: Essay Paper: #74465810 Related Topics: Multinational Corporation, United Kingdom, Multinational Companies, Fiscal Policy
Excerpt from Essay :

Balfour Beatty UK

The multinational infrastructure PPP firm

The rise of the public-private partnership (PPP) during the onset of the global financial crisis in 2008 is most representative of market activities in the infrastructure investment sector. Appropriations linked to economic and fiscal policy in the UK since this period has had influence on the steering of PPP projects and the strategies designed by participatory entities. Conversely, the PPP relationship to infrastructure in urban planning has been nothing short of formative in the articulation of new terms to the future tax and economic foci of Britain' fiscal and monetary policies.

At the forefront of this recent history, is the UK construction and investment company, Balfour Beatty. A leader in the PPP sector, the firm offers exemplary case study to assessment of how government policy has affected one of Britain's previously cash flush business climate. Infrastructural projects are now met with unique obstacles. Much of this constraint is related to the recent policy changes in the UK's economic and fiscal budgetary strategies. The foregoing discussion reveals how variations in the business cycle inevitably have profound effects on economies of scale, and the overall performance picture of multinational enterprises. Balfour Beatty's presence on the scene of Britain's market during the reform of national economic policy in 2010, with forces of global market capitalisation is the subject of this analysis.

With the publication of Matthew Taylor's (2008) Living Working Countryside: Taylor Review of Rural Economy and Affordable Housing report a new era in PPP development seemed to be underway. New market construction and investment by private entities had a huge impact. Effectively made defunct in the wake of budget cuts, Taylor's proposal for a sustainable Britain could now only be met by PPP designation of projects attributed to the oversight of private investment firms. Devolution of public finance for housing projects has had deep effects in the construction market, and of course start-up on projects in the public housing sector. Communities under Quango management also fell short due to elimination of administrative funds to the UK's nongovernmental organisations. The Taylor Report's importance as Britain's future model of sustainable infrastructure has been the subject of much debate since announcement of the 2010 Budget.

The spirit of equity within the sustainability message described in the Taylor Report continues to have influence in investor decision, however. Recommendation 5 to the 2008 Report articulates the enforcement of rules and incentives to planning projects, 'The Government should review the regulatory burdens and incentives placed upon local planning authorities which focus planning departments on short-term delivery targets and development control, to ensure that addressing these short-term requirements is more strongly supplemented by support for planning for communities in the longer term' (Taylor Report 2008).

Little did Taylor know that at the time of his Report, the shift in the global economy was soon to preempt regulatory infraction on planning, and greatly reduce incentives to the point that they dissipated into thin air.

When UK HC 451: Budget 2010: Securing the recovery Economic and Fiscal Strategy Report and Financial Statement and Budget Report March 2010 was reviewed by the House of Commons, definition of the future of the UK's national monetary and fiscal policy was laid forth with special provision. Characteristic...


The flux in economic growth has particularly affected the financial and housing sectors in Britain; sectors that are a particularly important source of tax receipts (UK HC 451-2010, p. 201). Historically, financial company corporation tax has accounted for approximately 25% of overall corporation tax (£10 billion in 2007-08), including income tax and NICs on salaries and bonuses (UK HC 451-2010, p. 201).

For companies involved in both the investment and construction industries such as Balfour Beatty, this has double impact in that the housing sector provides revenue directly through stamp duty (UK HC 451-2010, p. 201). Prior to the economic crisis leading up to the 2010 policy, the financial and housing sectors saw rapid growth in activity and asset performance, with 'the rise in housing and financial sector receipts from 2002-03 to 2007-08 account[ing] for half of the increase in total current tax receipts over [the] period' (UK HC 451-2010, p. 201). An estimated 2ae % loss was sustained by the financial and housing sectors record of GDP in 2009-10, with a considerable structural decline in tax receipts. Fiscal policy reflects trend output growth at a quarter of a percentage point lower than the centre of the forecast, with economic projections on public finance also subject to percentage point changes (UK HC 451-2010, p. 201).

Supplying construction to the housing sector and infrastructure support services to maintenance of commercial and community investments, Balfour Beatty is a global leader in new market sustainable building. A key strategist to Britain's PPP agenda, the Company's activity on the market involves interests in '31 concessions in the UK, 18 in the U.S. And one in Singapore' (Balfour Beatty 2011). Also a vital force in PPP markets abroad, Balfour Beatty sees 'major growth opportunities in the U.S.' with its front position in the military housing market, the Company is 'well positioned to undertake privatisation projects in other sectors' (Balfour Beatty 2011).

Approximately half of reported revenue comes from outside the UK with over 30% from the U.S. And around 15% from the rest of the world. Share prices to the Company's performance in 2011 continue at a profit (Figure 1).

13-JUN-11 at 17:35


The infrastructure services component of Balfour Beatty operates 'across the infrastructure lifecycle with strong positions in major markets' (Balfour Beatty 2011). The Company has four (4) businesses: 1) professional services; 2) construction services; 3) support services; and 4) infrastructure investments. The Strategic acquisition of entities through the Company's investment division in the UK and U.S. PPP markets means that Balfour Beatty has more leverage in advancement of related non-PPP market opportunities for the corporation to take over management of controlling functions and improvement of portfolio asset quality.

Principals in business with Balfour Beatty are located across the globe in the UK, Europe, the U.S., South-East Asia, Australia and the Middle East. The Group works in collaboration with its international partnership from the public, regulated and private sectors. Integrated services comprise the essential foray into our creation and care of infrastructure assets: 'investment, project design, financing and management, engineering and construction, and facilities management services' (Balfour Beatty 2011). The Company's brand identity targets shared value with clients whom expect 'the highest levels of quality, safety and technical expertise' (Balfour Beatty 2011). The Group's core services represent a 'total' infrastructure approach (Figure 1-10).

1. Airports2.Commercial3. Defence

4. Education5. Facilities 6. Health

7. Power 8. Roads 9.Rail 10. Water

In 2004, the Balfour Beatty expanded its presence in Hong Kong with purchase a 50% acquisition of Gammon Construction from new market competitor, Swedish Firm, Skanska. Part of an echelon of construction and investment development firms the Group reflects the social responsibility approach toward conducting business with its customers and suppliers. At Balfour Beatty, 'Sustainability is collective responsibility' (Balfour Beatty 2011). With a vision of infrastructural projects as long-term investment, the scope of those PPP activities strengthens the Company's brand identity and market position based on a mission dedicated to social, environmental and economic impact. This is, of course, supported by 'excellent financial performance' and a strong cash position, as the Company…

Sources Used in Documents:


Balfour Beatty, 2011. Available at:

Department for Communities and Local Government (DCLG) United Kingdom, 2010. Available at:

HC 451: Budget 2010: Securing the recovery Economic and Fiscal Strategy Report and Financial Statement and Budget Report March 2010. Copy of Economic and Fiscal Strategy Report and Financial Statement and Budget Report -- March 2010 as laid before the House of Commons by the Chancellor of the Exchequer when opening the Budget, Stephen Timms, Her Majesty's Treasury 24 March 2010. Available at:

Cite this Document:

"Balfour Beatty UK The Multinational Infrastructure PPP" (2011, June 13) Retrieved April 13, 2021, from

"Balfour Beatty UK The Multinational Infrastructure PPP" 13 June 2011. Web.13 April. 2021. <>

"Balfour Beatty UK The Multinational Infrastructure PPP", 13 June 2011, Accessed.13 April. 2021,

Related Documents
Multinational Companies and Ethical Theories: Human Rights
Words: 1593 Length: 6 Pages Topic: Business Paper #: 98551341

Multinational Companies and Ethical Theories: Human rights issues in the global supply chain are one of the major challenges that multinational companies face in their operations. While these firms try to support human rights through various initiatives, the also violate these rights through other practices that characterize their operations (Arnold, 2010, p.371). The human rights paradigm has extended to incorporate emerging actors to an extent that the debate on these rights

Multinational Corporation Expansion
Words: 2537 Length: 6 Pages Topic: Business Paper #: 9983480

Multinational Corporation Expansion; Wal-Mart- to Australia Expanding into an international market is not an easy process, but a rewarding one. As a business executive of Wal-Mart Stores, a U.S.-based multinational company needs to consider expanding to Australia to seek new opportunities. In this case, Wal-Mart will have to begin a new store in the Australian market. The success of the business in this market depends on the market positioning, and other

Multinational Force and Its Mandate
Words: 4813 Length: 12 Pages Topic: History - Israel Paper #: 39473421

Colombia contributed an infantry battalion consisting of 265 personnel." (Multinational Force and Observers: Wikipedia Encyclopedia) Fiji sent an infantry battalion of 329 personnel. France provided 15 personnel to be stationed a Force Headquarters and with fixed wing unit. Hungary provided a Military Police Unit consisting of 41 personnel. Italy contributed the Coastal patrol unit consisting of 75 personnel and 3 ships. New Zealand contributed 27 personnel divided between support battalion

Multinational Relationships Review of Subject.
Words: 770 Length: 2 Pages Topic: Government Paper #: 49620603

One recent change that has characterized the nature of the relationship between MNCs and the host government is that the MNCs have begun to view the relationship as more cooperative in nature. Central to this shift is economic development outside of the West -- emerging economies today have their own knowledge and experience to contribute to the MNC. The shift towards a two-flow flow of benefits increases the bargaining power

Multinational Corporation Can Basically Be Defined As
Words: 3174 Length: 10 Pages Topic: Business Paper #: 68564887

Multinational corporation can basically be defined as a corporation that has its operations in more than one country or is registered in more than a single country. However, the accurate definition of a multinational corporation is usually difficult to determine. In most cases, such corporations are large in size and involved in the production and sale of products and/or services in several countries. As a result of their operations or

Multinational Enterprises Mnes Exploiting Opportunities in Emerging...
Words: 686 Length: 2 Pages Topic: Business Paper #: 45165294

Multinational Enterprises (MNEs) Exploiting Opportunities in Emerging Markets: The Problems and Successes of MNEs To begin with, legal and economic hurdles are some of the most significant problems MNEs seeking to further enhance their global presence encounter. Each and every country conducts its political, legal, and economic undertakings in a unique way. For this reason, MNEs seeking to exploit opportunities in emerging markets have to contend with various taxation, institutional, as well