Video Transcript: Tackling Infrastructure in an evolving market

Transcript

Moderator: Welcome to the Action Now infrastructure webcast, I'm Fiona Bolding, a director in our London restructuring practice, with a core focus on energy and infrastructure. I'm your host for today's webcast where we'll be talking about the trends we're seeing across the infrastructure world, including energy transition, supply chain challenges, rapid growth of certain sub-sectors, and cost pressures. The industry has long been grappling with the need to adapt and respond to an environment where the pace of change is accelerating, and projects are getting bigger and more complex to design, build, and operate. Today we won't specifically be talking about interest rates or inflation as we all know this is a highly leveraged sector, and costs of materials have significantly increase. Instead we'll be sharing some insights from the work we've been doing over the last 18 months, and answering some big questions such as why certain projects go wrong. There will also be some times for questions at the end. If you'd like to submit questions as we go, please do so. There should be a box to the side of your screen. I'm delighted to introduce the panellists joining my today, all are PwC partners, and all infrastructure experts so please welcome Matt Denmark from our corporate finance team, Izzy Gross for restructuring, and Tim Hilton, capital projects. Welcome to you all. So, let's get started, and we can't really have a discussion about infrastructure without touching on the M&A landscape. Matt, please can you tell me what's going on in the M&A market at the moment?

Matt Denmark: Sure, so, across the entirety of the M&A market volumes are down in 2023 quite substantially off the back of a couple of very, very busy years and energy and infrastructure hasn't been immune to that. So deals by volume across the energy and infrastructure sector are off about 30% in the last quarter compared to the same period last year. On some of the processes we're involved in we're seeing investors being more cautious, we're seeing a very thorough approach being taken to due diligence and buyers being perhaps less willing to take a view on issues that might emerge during the course of the deal. In some cases we're seeing a degree of mismatch between buyer and seller expectations around value and so deals are generally taking longer. But having said all of that, there are some bright spots. So in some parts of the market we're still seeing a very high level of interest and a very, very high investor appetite. So anything within the broad energy transition, so that going from battery storage platforms right through to things like bio-gas, we're seeing a lot of interest. And also in telecoms although that's a bit more of a mixed picture and I'm sure we'll come back to that later. Another feature we're seeing is strong interest for platform opportunities, so that's where you've got some built assets but also a green field pipeline behind that and investors prepared to back those businesses with their roll-out plans. That's a route to higher returns but it also comes with the additional risk profile associated with green field projects. We've also seen more in the restructuring space, some distress-driven M&A in the sector. I know, Issy, you've been involved in some of that, haven't you?

Isabelle Gross: Yes, well, I know you said bio-gas rather than biomass but obviously we've done a few of those projects together.

Matt: We have.

Isabelle: I think that we're definitely seeing M&A now as a route to resolving some of the distress that we're seeing across the sector. I think one transaction that we completed with our sectors in the oil and gas space over Christmas and throughout the course of this year, it actually completed about a month ago, was a large bulk terminal. And actually it's been really interesting because it's had to bring together the, kind of, restructuring expertise but also the M&A expertise that we have internally. So we've had to deal with a Dutch bankruptcy trustee who are very, kind of, difficult processes to get through, very different to the UK in the way that things work. But actually, as I said, we, kind of, completed that transaction about a month ago and got a really good outcome, much higher than anybody expected from our lender clients. So it was really good.

Moderator: Thank you. And Tim, just, sort of, bringing you in here and picking up on something Matt said around energy transition, I know you're working with the energy networks, I mean, what are you seeing in that space and how are they grappling with the energy transition?

Tim Hilton: Yes, well, I think what we're seeing is this huge amount of additional investment and, frankly, demand and requirement that's being pushed by the energy transition, which we're also seeing in the other sectors as well, like a significant increase in cap-ex spend. It's really forcing businesses to think quite differently about themselves and how they work. So one of the first things is the operating model that they've got in place sufficient to meet this demand? And normally the answer is something needs to change and they need to be thinking about that. That's already happened in many of those businesses, and I'm thinking, sort of, across the sector. But it's, kind of, the next consequential step of that, what does that mean knowing that they need to operate differently? So thinking around planning, thinking around planning that's beyond the regulatory cycle but in to a longer term horizon, and what that means for investment now. That's a really important part of this and that includes technology, and I'm sure we can come to some of that later. If I think about CEOs and the, kind of, leadership that we've had in the building over the last 3 weeks even, you know, that moved to a further investor perspective, and longer look ahead. It's also driving the conversations that you'd expect to have around workforce capability in terms of capacity, and the ability to service this need. Where are they going to get these individuals from? What is the other demands globally and with other infrastructure projects going to face upon those businesses? And then having understood their own ability to answer that question, okay, so we're straight in to the supply chain and the skills that are in that supply chain.

So they're drawing upon the same pool, got the same challenges around materials, and that's driving a really interesting conversation now about, well, what are the key skill sets with a, kind of, typically ageing workforce, what are the skills that are needed to deliver and respond to this? And then how does the supply chain respond to that? You can't just rely on it so how do you understand those supply chain issues better?

Matt: There's very much a global demand for those talents, isn't there? And I was with a client last night who had lost a number of their key technical staff to opportunities in the middle east.

Tim: Yes.

Isabelle: Yes, absolutely, and I think supply chain actually is quite an interesting issue that spans obviously across a lot of the infrastructure sector, and it's something that we're really starting to see. So not only the competition for people and encouraging people to come and build whatever it is that is in your particular area and that your company is focusing on, but also aspects like if you go in to the sub-contractor level we've seen some insolvencies in that space that have actually had quite a big knock on impact to a large infrastructure project, which wasn't really expected and maybe when you're sat there at the SPV level you weren't even aware that this company was, sort of, involved. I think that's been incredibly interesting. We've talked a lot about the, kind of, availability of materials as well and I think especially in the metals space we've seen a bit of a spate of some mining restructures, or distress situations coming up again. And actually I think that will be interesting to see how that plays out across a whole variety of different sectors in the space.

I think one of the other really fascinating topics that are coming up at the moment is the sanctions environment which, again, a lot of people in the infrastructure space wouldn't necessarily be aware of but there is some new legislation coming out over the course of December where actually depending on not just where the material comes from, and we've had incidences where projects have been impacted because once they'd got through their supply chain they realised that it was Russian steel, for example. But actually where the widgets are getting put together to create the thing that is then being used on the project, and this concept of a third country, and actually that opening up a whole new round of, kind of, sanctions responsibilities and liabilities and things as well. I think the other interesting thing about infrastructure is we've seen supply chain issues across a whole host of other areas. So, for example, the automotive industry had mass disruption in their supply chain a few years ago, especially with the onset of Covid, etc., and actually the answer there a lot of the time was to go fully integrated and you actually saw some of the big OEMs properly investing in companies throughout their supply chain to make sure that they had that security of supply. But across infrastructure the breadth of companies that are being supplied by maybe key specific suppliers actually means that that's much harder to do. So how you get the market to, kind of, support each other and get some of these key components through, which are really, really required to build out some of these big programmes, is going to be really interesting to see how that develops as well.

Tim: I think one build that I, just considering, so where we've looked at supply chain resilience through Covid but had a, kind of, credit risk angle, and then now I see the same issues around what are the tiers of the supply chain, where are they-, the weak spots, where's our scarce resource? Driving answering a different question which is am I resilient to productivity and the ability to deliver at the pace that I'm looking for? As opposed to these organisations have an order book now, and the supply chain knows there's an order book, but are they capable of delivering that? That's a different question but the same level of effort required from the, kind of, owner organisation.

Isabelle: Yes, and what's the margin there that actually gives them the resilience to make sure they can fulfil that, that order book that they've done, yes.

Moderator: Yes, absolutely. And exploring this a little bit further, I suppose the supply chain challenges (TC 00:10:00) you've described there could easily impact a whole host of different sub-sectors but particularly looking at the energy sub-sector, are you seeing supply chain challenges there, or other pockets of distress?

Isabelle: Yes, so I think wind has obviously been across the press just generally, and actually the ability to get turbines in to, if we talk about the UK, generally, you know, port capacity and things like that to actually get some of these builds going, but also just the general supply, kind of, across the entire of Europe in terms of getting turbines up and running. Wind, the wind sector's also had quite a lot of other problems. So we've seen incidences of distress arising from things like PPAs and the structure of PPAs. You know, these contracts take a really long time to negotiate, and trying to amend them if things have gone off plan is actually incredibly difficult. We've seen some of the offshore wind farms have problems with things like turbines sinking, believe it or not, with people not, kind of, securing the turbines to the ground properly. We've seen problems with cabling actually getting the offshore generation back on land. Grid connections, connection issues, so these things are incredibly technical and complicated. Tim absolutely hates me putting it like this as well but there are these new, massive turbines that are out there and actually they're, kind of, almost eating themselves because they're so big that actually the gearboxes, they, kind of, grind away at themselves as well and that's actually causing distress across the market as well.

I know, I'm sorry, you're an engineer and you're much better at talking about that kind of stuff than I am. But I think it has been really interesting. And a couple of other areas in terms of energy as well, so the giga-factories is something that we're starting to see pockets of distress in as well, that's an area where they're making these, you know, EV batteries for cars, there's huge demand, but actually these businesses have gone from start up to being pretty massive in some situations incredibly quickly, and getting all their corporate governance, all the stuff that people think is really boring, but getting all the corporate governance sorted, getting access to the raw materials and their supply chain, getting their, kind of, distribution networks and everything sorted out as well has meant that that's a really interesting, kind of, sub-sector that we're starting to see a bit more distress in. And then the last one, we all saw it 2 years ago, or 3 years ago, however long now, with the energy retailers and the impact that the high volatility of energy prices had with the price cap and everything else. As we start seeing prices come down for retailers, so the companies that supply you and I as individuals, it'll be interesting to see how they've, kind of, managed that and hedged, and whether they're now, kind of, positioned for strength after so many of them failed in the market. But also on the non-domestic side, so where they actually supply companies from our insolvency practice, so just dealing with, kind of, Joe Corporate out there, and actually what we've started to see is when we go in as insolvency practitioners, they owe a lot more money to their energy company than they used to. And actually are those energy companies, those non-domestic suppliers, properly on top of their debt book and managing all of the risks around that? And that's another theme that we've seen, kind of, coming on the horizon. So there is still loads of great stuff happening in energy but also if you're not getting it quite right there are pockets of distress there too.

Moderator: Thanks, Issy. We've spoken quite a bit about energy and I guess just turning to you, Matt, what else are you seeing in the infrastructure space?

Matt: Well, if we come back to capital and investors and look at fundraising, overall fundraising volumes are probably at a 10 year low right now, but as with M&A the headline doesn't really give you the full story in that, one, there's still quite a bit of dry powder out there from previous fundraise rounds, whilst some managers are undoubtedly finding it more difficult to raise capital in the current environment, some of the more established platforms are successfully raising very large funds, particularly targeting things like energy transition. I think on where investors are looking to play in the market as well, we've seen over time emerge very much a blurring of the boundaries between the funds that might have started out as PFI investors and over time they've diversified what they do, they've come in to things like renewables, and they've gone up the ticket size. And at the same time some of the larger, traditionally big ticket funds who might have traditionally invested in things like utilities, have actually come down a bit on the size of deals that they're targeting, particularly around some of the platform opportunities that I mentioned earlier.

I think one other, perhaps one other point to note on this point is if you look at the listed market and some of the listed infrastructure and renewable funds, they have pretty much all been trading at quite a big discount to net asset value of the last six months. But interestingly we've actually seen that close up quite a bit over the last couple of weeks, just as market expectations around direction of travel on interest rates has moderated.

Isabelle: Yes, and I think the capital raise point of view is obviously quite interesting at the, kind of, corporate level as well. So if we take water, for example, you know, and again I'll get it wrong, Tim, because I know that you're all over this sector, but the press is out there saying, sort of, 96 billion is required, which means as we go in to the PR24 period that actually there's a huge demand for capital in this sector. And there's a lot of investment opportunities. But I think one of the interesting things that we saw a few months ago when the words "special administration" got splashed out across the press and everything was the nervousness from especially US investors who had just looked at this as very vanilla, UK regulated utility, a very safe place to put their money. And then suddenly having to have all these presentations from the restructuring world, including ourselves, about what that actually meant and how things could work, and actually I think it will be very interesting to see how that's going to end up impacting that sector going forwards and their ability to raise what is a huge amount of capital, and needing to, sort of, get out there and be on the front foot for that in order to get all of these projects going.

Tim: And I think that investor perspective is quite interesting when you, kind of, keep following it through the organisations both in water and, frankly, in the other parts of the sector, so, in to real work. So people are then looking for that confidence and comfort that, well, we've got a business plan, we've got a regulatory position, we may have an understanding of a regulatory position. What will that mean for us? We know what our volumes are, we know in broad pictures what we need to do. So what are the projects that we are doing today and how do they contribute to that? And how are we comfortable as a leadership team, as an investor, that that activity is happening, A, as we planned, and B, is going to achieve those outcomes. And I think that's another area where, sort of, we're driving an increased level of capability, and organisations are needing to drive that, sort of, capability now in a way that, you know, was always ever-present but this, increased level of focus has now lifted that up.

Moderator: Yes. So, we've spoken about some of the challenges in the water sector there, and I was just interested, Issy, are there other sub-sectors where we're seeing problems with raising capital?

Isabelle: Yes, so, I think the big one, and I did an interview for information on this probably about a year ago, and we'll go through and correct all the things that I said that were going to happen that maybe haven't quite come true yet, that is fibre and the outlet space in the UK. So I think that is an absolutely fascinating sector. Matt, kind of, mentioned it upfront as an area where there is a lot of opportunity but also there is some distress emerging. So to give people a quick counter through how that's happened, big growth area in the UK and across Europe, each government's, kind of, chosen how to do it every so slightly differently, but in the UK there was a big focus originally on building the infrastructure, getting the assets in the ground or across telegraph poles, or in the ducks, whatever you want to call it. And just getting it out there so a build it and they will come type thing, and financing was done on Homes past and the, kind of, capital projects plan. Actually as that market has evolved there's much more focus now today on actually generating cash. So ARPU, which is average revenue per user, penetration, so the number of customers that are ready for service that you have actually managed to sell your product to is becoming increasingly important across the whole space.

We've actually got five live mandates in the fibre space at the moment and they are really broad, so we're working for debt equity and the corporates across those five, and actually the big thing that we're doing, and really getting in there and helping some of the companies get to grips with cost cutting plans, and that's one of the areas that's really interesting, so going back to your point about staff, is actually if you've got a sub-contractor who's doing civil work and you want to slow them down or maybe manage the contract, or pause them for a while, actually they're getting sucked up in to some of these other big capital projects across the UK. So that's a really interesting dynamic to manage.

But also in terms of, kind of, bringing info (ph 19.11) investors up to speed with how you might go about doing a redundancy programme, how you forecast on a cash basis rather than a project basis, what you need to do to get to cash break even and what your, kind of, options are. And it's the same kind of questions that are coming from the lenders, from the companies as well. And I think one of the interesting things that we might see in this sector, and we haven't really seen to date, is whether that means that there's going to end up being some kind of insolvencies. Because I think the market previously expected that, yes, there would be mass consolidation, it'd need to go down to a much smaller number of players, but when you get in to the guts of these companies, you look at their back end functions, you look at what they've built, how they've built it, where they've built it, who's over-built them, there's a bit more of a question around actually are all of them going to have that, kind of, right to survive? But there is also (TC 00:20:00) a lot of interesting JV arrangements going on, we're advising on at the moment. There's still equity that's interested in the space, and so a lot of it is looking at the strategic options for those companies as well. Who's near them, who would make sense to, kind of, merge with? Whether it's a full merger, JV, or otherwise. So, yes, fibre's still super interesting.

Matt: Another area that is, I would say it's certainly not struggling, actually it's a more exciting set of opportunities but clearly a challenging set of opportunities is on the green field side. If you look at some of the large scale projects that are coming through the pipeline over the next few years around things like hydrogen, and hydrogen production from the smaller scale electrolytic up to the much large plants, carbon capture and storage, perhaps a bit further on again things like alternative fuel, sustainable aviation fuel, some really, really large, really interesting projects there. But they've all got reliance on technologies that have been proven at scale to differing degrees. A lot of green field construction risk, a set of risks that the traditional EPC contractors in the market probably won't be minded to take, at least in full or at the scale required. And also totally new business models that are entirely dependent on government support in its various forms, and regulation. But from the corporates and investors that we work with, there is a lot of interest in these things, but with the right structures and the right risk allocation. So I think that's really exciting but undoubtedly is going to be a challenge.

Moderator: Thanks, Matt. I guess just turning the conversation, it goes back to the beginning, the origin of infrastructure for a lot of investors, and that's PFI in the UK, and also the PPP model that's been exported internationally. I mean, certainly I've seen on my projects in the UK that where there is distress tends to be on projects where there are ongoing disputes between parties, and then looking more internationally at my projects there, the issues tend to come from more construction delays and associate funding requirement. The UK media certainly shines a spotlight on the value for money of PFI contracts and, sort of, highlights the fact that there's increasing costs linked to inflation, ongoing disputes, and increasingly, sort of, hand back risks as well with some of these older projects. I guess turning to you, Matt, I mean, what's your view on this? Do you think the PFI model is dead in the UK?

Matt: Well, I think it's certainly the case that under the current government we're not going to see PFI or PF2 being rolled out on new green field projects but maybe looking a bit further ahead and just taking a bit of a step back we're in a situation where there is a developing backlog of need for investment in public infrastructure in the UK. Debt to GBP is very high so whoever forms a government next year and beyond is probably not going to have that much headroom in terms of ability to borrow more money to put in to those types of infrastructure. So it probably wouldn't be the biggest surprise in the world to see some form of model for getting private capital in to more public infrastructure emerge over the coming years. Although I think the big difference between where we are now and where we were in the early 2000s when PFI really, really took off in big volumes is government's also constrained at a revenue funding level as well. So any moves in this direction, I think, are unlikely to be of the scale that we saw back at that point in time.

Moderator: Yes, I completely agree with that. Okay, just looking at time, I think we'll go to some questions now. We've had quite a few come through. The first one is, I was at a PwC women in restructuring event last week and Priya Lencarnie (ph 24.13) talked about AI and disruption. How is that impacting infrastructure? I don't know who wants a go? Try and answer that one, Tim.

Tim: I'll take a go, mainly because last night I was chatting to Leo Johnson in our disruption team who was showing me his AI-based tool for looking at innovation. And that's one example so I'll cover a few but I think what I'm seeing now, certainly across a number of businesses, and at different levels from execution up to strategy, is the proliferation of capability now and understanding of the implications of this. So Leo yesterday was explaining to me how his tool and capability is able to look at a really distinct set of criteria and asses, kind of, the right tools for innovation that are relevant to a typical, or a specific company or market segment. Which was really interesting. I've seen the adoption of language models to enable people to link data sets within their own organisation, so instead of suddenly having highly technical individuals trying to create data lakes and understand the ability to interrogate that, we now have tools and capability that are available to say, 'I'd like to connect this with that, and I'd like you to tell me what that means for either the prioritisation of projects or the delivery of selection of sites for renewables, or those sort of items.'

We've seen that in consenting as well, so if you think about the large impact on major projects of consenting, not just from a planning perspective but also all of, you know, environmental consenting, design consenting, approvals, how do you then understand that in the context of a packaged piece of work with a contractor, you know, the different design states? So that's a really complex problem that these, sort of, tools can use and help us with. And I've also seen then its application in considering the communication within a business and the emails, the chatter essentially, what's that telling you and how can that give you leading insight beyond the reporting at the end of the month which told you what happened a few weeks before that, in to what's the issue now, how are our people engaging, what can we do more, and what can we do better? So I think those areas, I think they're really, kind of, diverse in their application but they're starting to be quite real. And I think it's going to be very interesting in the next short term, like near term, that the impact that these have on projects for the pace of decision making and the ability to, kind of, make more informed decisions sooner.

Isabelle: Well, and also the protective side of it, right? Like, I remember when we first met eight years ago you had this new proposition around monitoring, like, the use of cranes and whether a crane was active for as long as it was supposed to be as per the build programme, and actually being able to say and predict that this is starting to go off track, sort of, now today because that crane hasn't been doing what it was expecting to be doing, and looking at the quantum of, sort of, materials that are arriving on site and actually saying, 'Oh, you're not getting through the materials as fast as you would be doing.' And things. So I guess from the, kind of, monitoring the chatter point of view, actually you can pick up quite a lot more in respect to that.

Tim: So that, I agree, so that multi, sort of, criteria decision making, you can handle a lot more, you can look at different indicators that are not necessarily intuitive to tell you how your projects and deliver is going, in advance of a backwards look. So that's absolutely fascinating. I think the other point where we've invested quite a lot of time is thinking about how do you, particularly in an asset-intensive business, make good decisions about the projects that you intend to do, and how they meet either your regulatory requirements or your, kind of, value framework for delivery, if you've got thousands of projects, some of whom you haven't designed or planned yet, and some of whom you have, how do you know as you're going through the course of a price control period or, kind of, a delivery cycle that you are continually making the right decision without doing a six month planning exercise? Well, that's where these, sort of, tools start to give really informed scenarios and impact.

Isabelle: Yes, and it fits in, I guess, as well to the corporate governance point that we were, sort of, just ended up chatting about briefly before starting this panel of, like, when do the big companies have problems? And actually it's when you don't get the reporting of things not going well, kind of, coming all the way up to the board, maybe it's because people are intimidated by the board in your example, or because actually those processes and systems just aren't there. So automating as much of that as possible is quite exciting. So that's good.

Tim: Agreed.

Moderator: Yes, absolutely, thank you. Just looking at the next question that's come through. Perhaps, Matt, I can turn to you for this one. What are the risks do you see facing the UK infrastructure market over the next 12 months?

Matt: Well, where to start? I mean, we've heard about quite a few risks so far today, so some of those are sector-wide around things like supply chain and the availability of materials, people, skills, some of those are perhaps a bit more focused on sub-sectors like some of the issues around fibre. But I would say that the one consistent theme that we, and the one consistent ask that we hear from people involved across the whole market, is really around regulation and policy in that investors want to see a stable regulatory environment above all else as that gives clarity and comfort around making what are very, very long term investments. And also in some of the newer (TC 00:30:00) areas of the market that are very much going to be dependent on government support, at least as they emerge around things like hydrogen, carbon, carbon capture, real ongoing commitment to that government support to get those new areas off the ground.

Isabelle: Yes, definitely, that's actually from the investor point of view as well, which I know is not getting down to doing the actual work and everything else but that's definitely a theme that I think we're hearing from people across the whole spectrum actually of the market, is having that, kind of, solid base of understanding what things are going to be looking like. Because infrastructure is a long time horizon, right, and so you actually do want to know what's going to be happening in ten years, fifteen years, or at least have a rough idea. And so, yes, I think that it one of the big ones, definitely.

Moderator: Thanks, Issy. We've got one more question that's come through, perhaps Tim, this one's for you. My business already has a mature risk and assurance process dedicated testing team, what else do I need to consider?

Tim: I think it becomes more about that environment and that construct, if that makes sense, then for me I always go, well, are you comfortable that people have understood and have the right behaviours in the business to, kind of, make that an easy ride for you assurance and risk teams? And what I mean by that is, if I think back five or six years, you know, doing base-lining activity, trying to drive data quality, and then starting then to have reporting going straight up to management from systems as opposed to through a series of reports that are reviewed by different layers of the organisation to tell the right message. People need to understand that the input, what they're doing today, the data and information that they're putting in is a really important part of that business' decision making process, and then seeing-, and then understand the behaviours around that and the incentives.

So in some organisations we've, kind of, seen the use of, like behavioural economics, how do you game-ify this, how do you incentivise people to, kind of, win the challenge of meeting their data requirements, etc? It, sort of, it almost seems silly but it's not at all because those are the things that business is making decisions about, they help you with the leading indicators that you've just described which are non-outside of reporting. And so how do you instil that culture, not just of accountability but, kind of, inspiration if that makes sense, within the teams to, kind of, drive that forward. So that's certainly something that I'm seeing at the moment and particular as you're trying to build capacity, and the capability overall to meet these substantially different cap-ex demands, that's really critical because that needs to then flow through in to your supply chain and then through, as we've just discussed, through the tiers of your supply chain, you need to have some comfort in that. So it's more than just specifying a requirement in your contract, it's how are you going to help people to behave in a way that supports you best?

Moderator: Thank you, I think that's almost enough of our questions and what we've got time to cover, but just before we draw this to a close it would be really great to hear one key takeaway from each of you. So starting with you, Matt?

Matt: Yes, sure, I'll go first. And I think the one takeaway I would give is this is a really broad and really resilient sector, so of course there are always going to be projects or companies that come up against challenges and things don't go quite so well, but that isn't the case for the vast majority of investments in the sector. And if you take a step back and look at the bigger picture and some of the trends across the whole of society and things like decarbonisation, digitalisation, that is going to require huge amounts of investment coming in to energy and infrastructure over a very long period of time. So it's a sector that is going to offer exciting opportunities for a long time to come.

Moderator: Thank you.

Isabelle: Even I agree with that, so there we go and I’m the negative one.

Tim: Yes, so, I guess my perspective would be, I mean, we talked before this session a little bit about some of the, kind of, large disputes and, kind of, arbitrations, the things that can, kind of, really challenge the delivery of an infrastructure project. And actually those hard things of establishing the right operating model, having people understand their accountabilities within that, having the scope right and well communicated, and then having that flow through the supply chain. That's still, doing those hard things well is the root to drive the outcomes that you're describing. And, you know, I'm seeing a really increasing level of capability within the sector, that's where my last piece is. Like, we must be investing in that capability.

Isabelle: Well, people who know me well on this, meaning that no one will be expecting me to not be cheesy so I'm going to bring it back to the title of this session, and my key takeaway is actually to act now. But, and as cheesy as that sounds I think it is, like, a really valuable piece of advice, genuinely. So the sooner that people get in, can resolve disputes, can get on top of what's going off plan, can bring stakeholders together to actually come to a consensual solution around things, the sooner you notice that your, maybe your refinance, I mean, you mentioned it at the beginning and we haven't majored on it here but, you know, interest rates are up, refinancing is going to be a bit more difficult, there are still other pressure in the sector. As soon as you realise that things are going off track a little bit, actually start engaging in it, don't bury your head in the sand. It's very easy to do and often doesn't end well. So it is, cheesy as it is, to act now. So there we go.

Moderator: Thank you, Issy. So that brings us to the end of our act now infrastructure webcast, we're going to follow up individually with those of you that have asked questions and we didn't have time to answer. Thank you of course to our panellists, Matt, Tim, and Issy, for taking part and sharing your insights. And thank you to everybody for listening, I hope you found this useful, and please do let us know if you have any feedback, or feel free to contact us directly if you'd like to discuss any of the topics covered today. Thank you.