Construction export support reaches new high
The annual report of UK Export Finance (UKEF), the export credit agency, shows that it provided more than £514m in support for construction industry exports in the year to 31st March 2016.
Overall, UKEF’s accounts show that it supported more contracts last year than it has for the last 25 years, with a 23% year-on-year increase in the number of exporters supported. UKEF supported more than £800m of new UK export contracts with trade finance and insurance and issued £1.8bn of export support.
UKEF is the operating name of the government’s Export Credit Guarantee Department, which is perennially the source of political controversy on account of its exposure to allegations of ‘picking winners’ and providing state-subsidised financial services to private companies. ECGD traditionally argues that it is supporting the UK economy by helping UK companies win contracts that would otherwise be awarded to overseas competitors. Its existence goes to the heart of any debate about the proper role of government.
Companies supported by UKEF last year include Kier. When Kier bid for a contract to develop part of Dubai’s Bluewaters Island site, UKEF gave Meraas Holding, the project sponsor, a US$317.9m loan in exchange for Kier getting the tender.
While some might see this as a murky area, Kier executive managing director Paul Woodman said it was just good business. “This is a significant contract for Kier that will support our growth in the Middle East,” he said. “Working with UKEF has allowed us to offer a broader range of solutions to our customers and help achieve our export goals.”
Margaret Eyres, UKEF’s head of direct lending, said: “UKEF support can make a real difference between valuable orders being won and lost. Companies like Kier, for instance, are able to compete for construction contracts overseas with confidence in the knowledge that they have first class financial support behind them.”
UKEF chief executive Louis Taylor added: “UK Export Finance’s mission is to ensure that no viable UK export should fail for lack of finance or insurance from the private sector. This year’s results show that we are making significant progress in reaching a wider customer base. We will continue to be innovative and flexible, anticipating the needs of exporters and finding ways to meet them.”
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This article was published on 13 Jul 2016 (last updated on 13 Jul 2016).