:00:07. > :00:16.at half-a-dozen! As concerns are raised, I am happy to look at them.
:00:17. > :00:20.
:00:20. > :00:28.Thank you. Good evening. New schools, and
:00:28. > :00:34.railways, the Government's projects costs lot of money. Is it a Pipe-
:00:34. > :00:37.trained? Do jet-setting politicians reward Scotland at all? We will ask
:00:37. > :00:39.the First Minister. The Government have called it a mega-plan, an
:00:39. > :00:42.infrastructure strategy which includes shorter term projects such
:00:42. > :00:45.as new college buildings in Inverness and Glasgow, and long
:00:45. > :00:49.term aspirations such as a high speed rail link to London which
:00:49. > :00:53.wouldn't be completed until 2030. It will cost �60 billion and the
:00:53. > :00:56.Government wants the private sector to pay for much of it. In a moment,
:00:56. > :00:59.we'll talk to the Chief Executive of the Scottish Future's Trust who
:00:59. > :01:07.will have to deal with that funding. But first Julie Peacock has been
:01:07. > :01:13.looking at the Government's plans. These are ambitious plans. If it
:01:13. > :01:18.goes ahead, it is a big spending spree of �60 billion. So what are
:01:18. > :01:22.we going to get from this? It is a long list. In total, 54 major
:01:22. > :01:28.infrastructure projects and 33 programmes. It includes investing
:01:28. > :01:34.in the rail and road network like up grading parts of the canine and
:01:34. > :01:39.a 96. There are plans of new schools, hospitals and housing. The
:01:39. > :01:45.government claims each of these projects will support 1,400 jobs
:01:45. > :01:50.and for every �100 million invested, there will be �160 million of
:01:50. > :01:55.economic activity. That figure of �60 billion doesn't even include
:01:55. > :02:03.plans to invest �9 billion on a high-speed rail linking Scotland to
:02:03. > :02:06.London. That would also depend on investment from Westminster. So far,
:02:06. > :02:15.so good. But opposition parties say the plans are vague and unrealistic.
:02:15. > :02:20.Is this a wish-list or a detailed planned to get Scotland out of
:02:20. > :02:24.recession? Alex Neil visited by a new library being built in Glasgow.
:02:24. > :02:28.If the plans come to pass, there will be a lot more of this. And it
:02:28. > :02:33.will not only mean public buildings. Big infrastructure projects are
:02:33. > :02:37.planned to improve roads and railways. We will connect our
:02:37. > :02:41.cities which will be a boost to employment and to growth in
:02:41. > :02:45.Scotland, not just in the cities, but in all the areas serviced by
:02:45. > :02:50.the cities and what this plant is about is boosting the economic
:02:50. > :02:55.growth rate in Scotland to try to get us and for position to be in a
:02:55. > :03:00.competitive economy in the 21st century and to get jobs, jobs, jobs.
:03:00. > :03:05.Many commuters are on these roads have dreams of getting their own
:03:06. > :03:12.little bit faster. The SNP promises to make their dreams a reality.
:03:12. > :03:19.Just not yet. The A nine between Perth and Inverness will become a
:03:19. > :03:24.dual carriageway by 2025 and the upgrade of the B96 won't happen
:03:24. > :03:32.until 2030. That sounds like a pipe dream to Labour have. It is not is
:03:32. > :03:38.serious plan but a wish-list. It is nothing but a letter to Santa. It
:03:38. > :03:41.amounts to nothing. Many of these planned projects are regeneration
:03:41. > :03:47.away and who knows what the economic landscape will look like
:03:47. > :03:50.them. We can only guess what the spending priorities will be of any
:03:50. > :03:55.future government 19 years from now but businesses have welcomed the
:03:55. > :03:59.plan. Although the time lines are links the, appeased we have a
:03:59. > :04:03.commitment to these roads being done and we have a time frame for
:04:03. > :04:07.them being completed which is important because it takes it
:04:07. > :04:10.beyond one parliamentary term. The one final positive news is this is
:04:10. > :04:15.a massive opportunity for the construction sector which has been
:04:16. > :04:20.badly hit over the last few years. How does the government want to pay
:04:20. > :04:25.for this? It claims to have it worked out. It is planning to use
:04:25. > :04:30.some public money and attract the rest from public sector investment.
:04:30. > :04:34.In something not dissimilar to PFI but most of these plans hinge on
:04:34. > :04:38.the Scottish Government being given the borrowing powers in the
:04:38. > :04:42.Scotland Bill. This is the first rock indication the SNP is likely
:04:42. > :04:45.to support that bill. I'm joined by the Chief Executive
:04:45. > :04:50.of the Scottish Futures Trust, Barry White, and from Edinburgh by
:04:50. > :04:56.the former director of Scottish Financial Enterprise, Ray Perman.
:04:56. > :05:01.This is a wish-list. Some of it might happen, some of it might not.
:05:01. > :05:05.Do you think, in the financial crisis, this may give you an
:05:05. > :05:12.opportunity to get financing for some of this? First of all, there
:05:12. > :05:17.is undoubtedly, in the near term, there is greater certainty in the
:05:17. > :05:21.early part of the plant and it does say the spending reviews and
:05:21. > :05:28.borrowing powers, the rest of the plan may move and shift in time
:05:28. > :05:34.which is red. There is a great opportunity at the moment, you know,
:05:34. > :05:38.the construction sector had a huge price inflation in the last 10
:05:38. > :05:43.years and part of that has actually now come back down so the public
:05:43. > :05:47.pound buys a lot more than it did several years ago. From that point
:05:47. > :05:53.of view, projects at Glasgow college would have been taken to
:05:53. > :05:58.the market in procurement, we are confident of getting a bet a deal.
:05:58. > :06:01.So, building companies cannot get any work so if you want to spend �1
:06:01. > :06:06.million of public money, you will get a lot more houses and schools
:06:06. > :06:11.than you would have got. construction industry are delighted
:06:11. > :06:18.we will bring these projects forward. Scotland is stealing a
:06:18. > :06:22.march on the rest of the UK. Things like the NPD programme with �2.5
:06:22. > :06:26.million investment is one of the biggest in Europe so it is a very
:06:26. > :06:31.significant programme of work, one that is welcomed by the industry
:06:31. > :06:35.because it will have people working on site building a college that
:06:35. > :06:41.would not have been built otherwise which is good for employment and
:06:42. > :06:44.teaching and learning in Glasgow. notice that while obviously some of
:06:44. > :06:50.the �60 billion is fully speculative, the high-speed rail
:06:50. > :06:56.link wasn't even included in that. Is that because it is piped in this
:06:56. > :06:59.guy or Pike on rails? We would love to see it built but the coalition
:06:59. > :07:04.have their own problems getting that through the Home Counties so
:07:04. > :07:11.when it gets to Scotland is anybody's guests. Is there an
:07:12. > :07:15.opportunity perhaps, we are living in a world of zero interest rates.
:07:15. > :07:20.If you are an investment trust or pension fund, it is difficult to
:07:20. > :07:28.get returns on money. So is there an opportunity it Government say,
:07:28. > :07:36.we guarantee a reasonably rate of return and they might be more
:07:36. > :07:41.interested? Let's leave PFI for the moment because that is a slightly
:07:41. > :07:46.different issue, but that is right. The reasons that Barry White was
:07:46. > :07:50.saying that construction costs are low at the moment, so it is good to
:07:50. > :07:54.build things now. But interest rates are rock-bottom so now is the
:07:54. > :08:00.time to borrow and invest in new infrastructure which will give you
:08:01. > :08:05.a return later on. When investment trusts and pension funds and other
:08:05. > :08:10.institutions invest in these things, what they are looking for a low
:08:10. > :08:15.risk, so they want the project to come in on time and on budget, but
:08:15. > :08:20.they also want a steady return over a long period because sometimes
:08:20. > :08:24.they invest for 25 years, so those are the issues they will need to be
:08:24. > :08:30.satisfied on before they put their money do. Barry White, let's not
:08:30. > :08:34.get involved in whether this non- profit does -- distributive think
:08:34. > :08:39.is PFI under another name, but the idea of all these products is to
:08:40. > :08:43.bring in private money to help get public infrastructure built. Is
:08:43. > :08:46.there an opportunity because of the low interest rates and the
:08:46. > :08:52.difficulty investment companies are having on making returns to do
:08:52. > :08:59.that? Interesting on the first point, the UK Government has lodged
:08:59. > :09:03.a review of the PFI, so we are swimming with the tide on that
:09:03. > :09:09.particular point. The opportunity that exists is to harness to make
:09:09. > :09:14.things. Banks have done diligence on risk management in the early
:09:14. > :09:18.stages and we can take that and harness it with the pension funds
:09:18. > :09:23.desire for long-term stable cash flows which we have just talked
:09:23. > :09:28.about. And to we finance the projects once they are built and up
:09:28. > :09:34.and running... Let's say you have a hospital. He borrowed the money
:09:34. > :09:39.from the banks. Yes. You build the hospital. You then get a pension
:09:39. > :09:44.fund to take over the hospital, pay off the bank loans, and they get a
:09:44. > :09:49.return from running the hospital, which allows them to pay off the
:09:49. > :09:53.loans and make a proper. They would refinements over 25 years at a
:09:53. > :09:57.steady rate and what they get out is something that matches their
:09:57. > :10:01.liabilities, which is what they are looking for, and what we would get
:10:01. > :10:06.in the public sector is the natural holder of long-term debt in these
:10:06. > :10:10.type of projects at a competitive price. From our point of view, it
:10:10. > :10:15.is good value for money. Do you have people knocking on your door
:10:15. > :10:19.at the moment saying, it is a tough world and we have lots of money, we
:10:19. > :10:23.don't think it is worth investing in factories because we are not
:10:23. > :10:28.sure about the economy and that is risky, but we would like to get
:10:28. > :10:31.involved with you? What we have is projects coming to the market and
:10:31. > :10:35.what we would like to do destructive those to bring in
:10:35. > :10:38.pension funds at the right times so from that point of view, the have
:10:38. > :10:43.dialogue with the pension funds and we know what they are looking for
:10:43. > :10:46.in terms of structure and to get that structure right to get them in.
:10:46. > :10:52.But that isn't all new because pension funds have been investing
:10:52. > :10:56.in bonds and the water industry for many years. What is new you provide
:10:56. > :11:00.them a new attractive returns than sticking them in government bonds.
:11:01. > :11:04.They are looking for a steady cash flow from the water industry and
:11:04. > :11:11.what we can offer is a steady cash flow from government accommodation
:11:11. > :11:16.and road projects. What are the letters we put in front of its name,
:11:16. > :11:22.is there... Is this a good way for the government, perhaps, to be able
:11:22. > :11:25.to turn the financial crisis to its advantage? Well, there are a two
:11:25. > :11:30.quiz for paying for infrastructure, out of current spending, which is
:11:30. > :11:32.what Scottish Government have been forced to do since devolution,
:11:32. > :11:38.since the Scottish Government doesn't have borrowing powers, or
:11:38. > :11:43.you borrow the money. Whether it is PFI or something else, those are
:11:43. > :11:49.the two quiz you will do it. The thing about PFI was there was a
:11:49. > :11:57.transfer of risk and now everybody assumes that everything is built on
:11:57. > :12:02.time and to budget but we have seen some very big publicly promoted
:12:02. > :12:05.schemes in Edinburgh, the tram and the Scottish Parliament, which were
:12:05. > :12:09.well over budget, with hundreds of millions of Pounds over budget.
:12:09. > :12:14.Pension funds and other institutions want to be sure the
:12:14. > :12:22.risk of getting the thing built on time and to budget is low. Thank
:12:22. > :12:30.Who is best placed to sell Scotland to the world? Is it Alex Salmond
:12:30. > :12:37.and his Holyrood team, or First Minister -- all the Scot and
:12:37. > :12:42.secretary, Michael Moore and his Westminster colleagues?
:12:42. > :12:46.Scot land has always made plenty of noise around the world, but our
:12:46. > :12:51.ambassadors in the Tartan Army are probably better at winning friends
:12:51. > :12:54.than winning business. That is the job of Scottish Development
:12:54. > :13:00.International, promoting trade and investment in 20 different
:13:00. > :13:08.countries. For the next 90 minutes, I will introduce you to the Co of
:13:08. > :13:12.Scotland's developing body,. They are capturing interest in fine
:13:12. > :13:16.Scottish seafood and whisky which sell well, and trying to open new
:13:16. > :13:22.markets. But no big deals are landed here without Communist Party
:13:22. > :13:25.approval, which is why the First Minister held talks with Chinese
:13:25. > :13:29.vice-premier. Business is a political backing can make a
:13:29. > :13:33.difference. I think it opens doors for us, it enables relationships to
:13:33. > :13:36.be started which were not there before. It is very important to
:13:36. > :13:41.show that all businesses have the businesses of the wider government.
:13:41. > :13:45.It is not just Alex Salmond who has been clocking up air miles for his
:13:45. > :13:49.country. This is his third official visit to China. The education
:13:49. > :13:53.secretary Mike Russell is not long back from promoting Scotland in
:13:53. > :13:58.India, and climate change minister Stewart Stevenson is in South
:13:58. > :14:03.Africa at the carbon conference. Foreign affairs is not devolved. It
:14:03. > :14:07.is principally the job of the UK government to fly the flag for
:14:07. > :14:10.Scotland right round the world. But since before the SNP was elected,
:14:10. > :14:15.the Scottish government has supplemented that effort with its
:14:15. > :14:21.own office in Brussels, and its own officials inside the British
:14:21. > :14:25.embassies in Washington, and here in Beijing. In Rio last week, the
:14:25. > :14:33.Scottish secretary was doing his bit for trade as well, and he
:14:33. > :14:36.reckons UK backing gives Scottish firm's international cloud. This is
:14:36. > :14:39.the 7th ministerial visit to Brazil in the course of the last 18 months,
:14:39. > :14:46.showing how important we treat it as a government. Four Scottish
:14:46. > :14:49.business, using the international network of the Foreign Office and
:14:49. > :14:53.UK t i, we are able to create the conditions which can allow visits
:14:54. > :14:58.like this where we expect at least �3 million worth of businesses for
:14:58. > :15:02.business here as well as more doors opened. So with Alex Salmond's
:15:02. > :15:08.influence on the world stage, would it be diminished if he led Scotland
:15:08. > :15:12.out of the UK or would it -- would independence allow Scotland and its
:15:12. > :15:17.pitch for business to be heard just as loudly and at least as clearly?
:15:17. > :15:23.I am joined live from Beijing would -- by Alex Salmond. Can you hear
:15:23. > :15:30.me? Yes, I can. There is a very long delay on the line which I will
:15:30. > :15:34.have to warn you about. No doubt he will ask short questions! Extremely
:15:34. > :15:38.short. We have been discussing the Scottish government's new
:15:38. > :15:42.infrastructure plans. I am curious as to whether that is something
:15:42. > :15:47.where you have been exploring the possibilities in China of getting a
:15:47. > :15:54.Chinese money involved in the private part of it? Yes, in fact we
:15:54. > :15:58.had a meeting with the Chinese Investment Fund yesterday, which
:15:58. > :16:03.included the government officials and also some of Scotland's
:16:03. > :16:07.greatest asset managers, like Abedin -- Aberdeen Asset Management
:16:07. > :16:14.and Standard Life. They were at the meeting. We were talking, among
:16:14. > :16:17.other things, not just about getting some business managing some
:16:17. > :16:21.aspects of the Chinese infrastructure, but also about
:16:22. > :16:27.infrastructure possibilities in Scotland. Would you be entirely
:16:27. > :16:32.comfortable if, for example, a Scotland hospital should end up
:16:32. > :16:41.being owned by a government entity which was owned by the Chinese
:16:41. > :16:45.government? Well, I think you'd better have a look at the structure.
:16:45. > :16:50.Deep structure does not transfer ownership of assets, but is one of
:16:50. > :16:55.the interesting differences between a non profit distribution model we
:16:55. > :16:59.are using and other models of investment. Ownership is not really
:16:59. > :17:06.what investors are looking for. They are looking for a return over
:17:06. > :17:10.a substantial period of time, to an investment, which is reliable and
:17:10. > :17:15.guaranteed. That is the attraction of investors. The Chinese
:17:15. > :17:18.Investment Corporation has been quite adamant, and publicly adamant,
:17:18. > :17:23.in discussing possibilities of investments including in Britain.
:17:23. > :17:27.He said -- it said it was industry -- interested in a high-speed rail
:17:27. > :17:31.project. It said it would in this day and age want some control over
:17:31. > :17:36.the destiny of these projects, not just putting money in expecting to
:17:36. > :17:40.get a return. Indeed, but I were -- I thought you were talking about
:17:40. > :17:45.the infrastructure plan that we launched today in Scotland. For
:17:45. > :17:49.example, I am not suggesting for a second, this is not a commercial
:17:49. > :17:53.insight I am giving you, but let's take you for example, Edinburgh
:17:53. > :17:56.airport is up for sale at the present moment. That is privately
:17:56. > :18:00.owned infrastructure, it is still infrastructure that would be very
:18:00. > :18:04.attractive to people. Or when they bid for that, they will be owned
:18:04. > :18:08.that part of infrastructure. If there was a port for sale, they
:18:08. > :18:11.would be owned by the company bidding for it. If we are talking
:18:11. > :18:16.about roads, hospitals and schools, they would be owned by public
:18:16. > :18:20.authorities in Scotland. What about foreign direct investment from
:18:20. > :18:24.China to Scotland? Is that something you have discussed, the
:18:24. > :18:31.possibility that Chinese companies, which are increasingly moving
:18:31. > :18:35.abroad, but partly half of the direct investment by China in
:18:35. > :18:39.Europe is in Germany. Have you discussed coming and setting up
:18:39. > :18:43.factories here? Of course, that is part of the discussions we are
:18:43. > :18:47.having not just here in Beijing but in the four other centres that this
:18:47. > :18:52.trade and investment mission is moving to. We have had some fairly
:18:52. > :18:59.substantial success already in that, for example, petrol china
:18:59. > :19:03.Investment in Grange Routh, which has secured the future of
:19:03. > :19:07.Scotland's largest petrochemical process for the foreseeable future.
:19:07. > :19:11.There is a number of other examples in the industries of energy and
:19:11. > :19:16.textiles. It is not just Scotland but every other country from Europe
:19:16. > :19:19.is coming from a long way back. Germany has had along standard --
:19:19. > :19:24.long-standing business relationship with China which has been much
:19:24. > :19:27.greater than any other European country. Scotland for the first
:19:27. > :19:33.time over the last two years, particularly this year, is getting
:19:33. > :19:36.very substantial visibility and profile in China, and that is the
:19:37. > :19:41.first step to getting very substantial investment in business
:19:41. > :19:46.relationships. What would you say, there will be some people, I am
:19:46. > :19:50.sure you would be so shocked to learn this, who would say in times
:19:50. > :19:53.of extreme financial crisis, there must be a better use of public
:19:53. > :19:59.money than Alex Salmond jetting across the world so China? What
:19:59. > :20:02.would you say to those people? would talk about the jobs and
:20:02. > :20:10.investment. Just take one example, this is just one example out of
:20:10. > :20:14.money. Last year, we negotiated in China, and then vice-premier -- the
:20:14. > :20:19.vice-premier when he came to Scotland announced, that Scottish
:20:19. > :20:24.salmon would be allowed to enter the Chinese market place. OK.
:20:24. > :20:31.the 30th, from nothing, it is now worth �20 million, and it is only