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In new era, developers must remember ‘social license’

Highlighting the positives of investment rather than talking about ‘infrastructure spending’ can make projects easier to sell to an increasingly wary public, according to industry heavyweights.

Infrastructure developers need to do a better job of explaining to stakeholders the economic payoff that comes from investing in infrastructure projects, panellists argued yesterday at a conference in Montreal.

Infrastructure pundits attending CG/LA's 10th Global Infrastructure Leadership Forum observed that citizens demand quality works projects but are reluctant to pay for it through taxes and tolls, or be inconvenienced by a new highway or airport nearby.

“You have this gap between what people expect and what can actually be provided with what little money they're willing to spend, either out of their own pocket when they're using it or through their taxes,” said Jiri Maly, president of asset management services at US developer Louis Berger.

Johan van't Hof, chief executive at construction firm Tonbridge Power, added that developers must be more conscious today of the need to gain public approval for infrastructure projects.

“The messaging and the communications need to be very specific,” Hof said. “Developers need to be far more conscious of social license.”

He said the old model for project approval, under which elected governments enact regulatory frameworks developers must navigate, is a broken system.

This increased citizen scrutiny partly stems from the dissatisfaction with the status quo seen in shock votes like the UK's decision to leave the EU or the election of Donald Trump as US president, according to Clifford Young, North American president of polling company Ipsos.

“Politics has been upended, completely changed, and that conditions the policy landscape,” Young explained.

Economic well-being is the public's top priority, Young said, citing an Ipsos opinion poll. Investing in infrastructure was the number one item for only 7 percent of respondents, while jobs, the economy and corruption came first for an overwhelming majority.

Investors and developers must turn this narrative around, Young said.

“If you just talk about infrastructure by itself, it ain't going anywhere. That's not the priority,” he added. “If you talk about infrastructure, do not talk about spending. Talk about investing. Take the positive, not the negative side of the scale. Link infrastructure with long-term economic growth, with job creation. Talk about it in terms of long-term investment, not in terms of spending.”