Blog 031 - My Electric Plant Initiatives

A topic I keep hearing come up and see a reasonable amount of news on is the developments in the world of electric plant, I am huge fan of the advancements in electric plant, but as always, I must consider how this will affect the world of Specialist Contracting. Whilst Specialist Contractors are predominantly at the cutting edge of innovation, they will likely have pre-determined investment and capital expenditure plans for the next 5 years already in place, with which they will probably be considering electric plant investment at some point. Until then, I have a fear of opening contract documentation one day in the near future and seeing it mandated in the scope that all plant will be electric, probably as a result of either a planning consent stipulation or a target for accreditation or award. This would mean significant investments and changes in strategy for so many Specialist Contractors.

Electric plant is undoubtedly the future, it will reduce carbon emissions and nuisance noise, ultimately improving the environment for everyone and helping to improve the image of construction. As a champion of Specialist Contractors, I have to think about the extraordinary expense of changing a plant fleet to electric and how it affects the Specialist sector. Specialist contractors bid prices are down and operating expenses are up, now is a difficult time for investment in replacing perfectly useable plant.

After kicking these thoughts around for a while, I developed a couple of ideas that I hope are either already in the works or could get picked up by the Government;

1. Government backed Green Business Asset Finance. The Government provides interest free asset financing to construction companies looking to purchase electric plant. The finance is provided at 0% or as close to 0% as possible and repaid over the typical lifetime of an asset finance agreement. The UK economy is transactional, therefore Government could promote their post-Brexit, economy boosting sales transactions by providing this financing to electric plant manufactured in Britain, such as JCB (I am aware demand would be an issue here, it’s a concept idea, not a bulletproof plan, relax). In my view of the world, this could create a “greener” and quieter construction industry and create British manufacturing jobs… it’s hard to see a loser in this deal.

2. The other idea I had would be for the Government to introduce a construction plant equivalent of a “Cash for Clunkers” scheme, let’s call it “Pounds for Plant”. This could be the perfect way to remove old plant from sites across the country and lessen the blow to the Specialists that need to buy it. In these times where the Government needs private spending to keep the economy moving, this could be a stimulus opportunity that pushes Specialists to upgrade sooner than planned whilst there is a financial incentive to do so. I don’t know what happens to some of the older machines that get traded in, I guess, depending on specification some can be scrapped, others, say the Tier IV engine machines could be sold to countries that are less advanced in their emission control than the UK but for whom a Tier IV engine would still be an environmental step in the right direction. At risk of not “staying in my lane”, this concept could be extended to the British Agricultural industry too, helping them in their post-pandemic and post-Brexit endeavours.

The above are simple ideas that come to me with little consideration for the wider impact that policy makes have to consider, however, Construction, as an industry, has shouldered the country’s economy for the last 10 months, as has manufacturing, why not provide some stimulus and assistance to say thank you and to deliver on the commitments that we will “build back better” and “build back greener”.

If you want to discuss any contracts that may have specified plant or if you need assistance preparing an investment and Capital Expenditure plan, get in touch by dropping me an email.

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