The Competition and Markets Authority has said it regrets resorting to a price cap remedy for the energy industry. Chair of the Competition and Markets Authority (CMA) energy market inquiry, Roger Witcomb, told Utility Week that the panel “sort of regrets” having to recommend a price cap for the industry, but that it will have the “most obvious and measureable effect”. “We sort of regret having to do it because normally we tend not to go for price caps. But in this case, the case was so overwhelming,” he said. “Clearly the price cap will have the most direct, obvious and measurable effect and that’s a big deal. It is nice to be able to hit a particular part of the detriment hard, predictably and soon, in the knowledge that as smart meters come in and we move on it will fall away of its own accord.” The CMA published its remedies for the industry in June this year and included that a transitional price cap for prepay meters should be implemented until the full smart meter rollout has been completed. Witcomb added: “It clearly will have an impact on competition in the sector today and it would be illogical for us to claim anything else. But our view was that there wasn’t much competition there anyway.” Source link

9 June 2016 | Deborah Shrewsbury The boom in construction activity and skills shortages, along with the knock-on effects of volatility in commodities markets and China’s economic slide are significantly affecting the costs associated with constructing real estate worldwide.   But the drama doesn’t have to become a crisis, says the International Construction Market Survey 2016, published by global real estate analyst Turner & Townsend, if operators at either a local or international level can understand how these changes could affect the delivery of major projects and programmes.   Companies that are able to start “thinking differently” and adapt to deploy the right tactics to manage risks and control costs could actually “seize opportunities in a new world”, says the report.   And it adds that despite being fettered by a strained supply chain, London remains a forerunner and one of the places expected to buck the general trend to see strong growth in tender prices in a booming construction market – mainly in residential construction.   Gathering cost data from 38 markets and analysing over £500 billion of global real estate investment, the survey paints a picture of an “overstretched, over-reliant and polarised market” within which two distinct types of markets have emerged.   These, it says, can be defined as the ‘overstretched’ – those experiencing capacity constraints and labour shortages, such as London and New York City, and the ‘over-reliant’ – who have seen weak growth in GDP because of oversupply of commodities and falling demand from China – such as Australia and Brazil.   Global construction costs are expected to rise overall by 2.9 per cent in 2016, and the report gives snapshots of the prevailing economic winds in the world’s megacities.   It says regions with a stronger exposure to the Chinese economy – such as Hong Kong, Singapore and Kuala Lumpur are likely to see a slide – along with Johannesburg, Perth, São Paulo and Santiago.   In fact, only nine markets of the 38 levels will see increases in construction activity over the next year, 10 will see falls, and 19 will see little change.   London, central and northern regions of the UK, and Northern Ireland are forecast to be among the nine that will “warm up” during 2016. But the shadow of a possible Brexit vote hangs over the UK’s longer-term prospects. The uncertainty has applied a gentle brake on investment growth and construction output since late 2015. The EU decision, warns the report, will have considerable implications for the future of Britain, Europe, and the wider global economy.   The International Construction Market Survey 2016 can be found here. Source link