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Published 07 May 2013 11:32, Updated 08 May 2013 11:33
Arup global planning leader David Singleton says the purchase of Strategic Economics Consulting Group will allow his firm to enter conversations with clients earlier. Photo: Tomasz Machnik
The Australian arm of global engineering firm Arup has bought six-person economics consultancy Strategic Economics Consulting Group to extend its range of consulting services at a time when funding for infrastructure projects is becoming harder to find.
The firm hopes that the acquisition of the Melbourne-based consultancy will give it access to new clients, particularly on the government and regulatory side, as well as to existing clients at an earlier stage in their decision-making process, Arup global planning leader David Singleton says.
“At the moment, with funds in short supply, making decisions about how best to use limited funds is really the name of the game and that’s what this kind of capacity really brings,” Singleton told BRW on Tuesday. “This business can stand at the front of a lot of our activity in the market and bring us to an earlier stage in the conversation about whether a project’s going to stack up.”
Arup, which did not disclose the value of the acquisition, had been in talks to buy the group long before last week’s announcement that the federal government faces a $12 billion budget deficit in this year’s budget, but that news only helps to “reinforce and support the decision we’ve made,” Singleton says.
The budget deficit is causing concern that there will be even less money to go around to fund the country’s crucial infrastructure needs. A coalition of infrastructure and housing lobby groups last week proposed the creation of an investment fund open to retail and institutional investors to sustain the country’s infrastructure development needs in the face of less public funding.
Arup’s move brings it into line with rival firms that already have the ability to propose and discuss early-stage business cases around infrastructure ideas. The firm has previously worked with external consultants around the early stage of projects or ideas. Strategic Economics Consulting Group will keep offering services to third-party clients, but will also be a key part of Arup’s own business development, Singleton says.
“I would hesitate to say we were playing catch-up, but most of our competitors already have this capacity,” he says. “You’ve got the technical brains that can come up with ideas, for example to do a port, an airport or a railway line. Now we will have access to people who can put that in the appropriate business language.”