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More private investment needed for infrastructure, report says


Posted on 17/01/2013 by Wayne Brophy FCILT

Last month's update on the National Infrastructure Plan, released by the Treasury alongside the Autumn Statement, revealed figures of £310 billion which are expected to be spent on infrastructure across the UK by 2015 in order to keep pace with demographic and market developments.

In the wake of yet more austerity measures, the government will be looking to finance as much of this as possible through private investment, which is why a new report by the National Audit Office (NAO) has this week recommended a greater "prioritisation" of projects in order to highlight the value for money of British infrastructure.

"Demand for infrastructure is set to increase, fuelled by population growth, technological progress, climate change and congestion," says NAO chief Amyas Morse.

However, with the global financial crisis still hindering the UK's economy, it is unlikely that the government will be able to fund the necessary upgrades alone – at least not without substantial tax increases and other costs to the general public.

The report therefore suggests the implementation of new development schemes that can showcase the value and sustainability of investing in British infrastructure for private firms.

According to Graham Robinson of law firm Pinsent Masons, one solution could be to move towards a Regulated Asset Base (RAB), whereby consumers are charged a fee to access an asset, with a central moderator placing a cap on all charges, reports.

Mr Robinson says this model could provide a successful solution for the trunk roads and motorway network, claiming it could help the government attract more private investment within the transport sector.

The need to adapt the way transport networks are managed is likely to impact on the logistics sector, and should be a consideration for any candidates currently in the hunt for transport manager jobs.

Part of the £310 billion which the government plans to spend on infrastructure could be used to electrify Northern Ireland's rail network, with £350 million set to be spent on the project, according to the Belfast Telegraph.

The decision has not yet been finalised, and there is a possibility that the scheme could be put back to 2030.

This has met with disapproval from Green Party politician Steven Agnew, who says electrification of the rail network should be a higher priority as it will deliver a vastly improved service while at the same time cutting operating costs by a fifth.

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