Britain needs more infrastructure investors, experts say

The British government should consider using tax breaks and infrastructure bonds to attract private investors to its National Infrastructure Plan, according to a report by law firm Berwin Leighton Paisner.

Of the 130 global infrastructure experts surveyed by the firm, 43% say prospects for British infrastructure projects have worsened since 2007, the year the credit crisis began.

Some 70% say access to credit is still the key driver of success for upcoming projects, and 59% believe the government should persist with public-private partnerships and private finance initiatives as a means of attracting extra funds.

The experts’ view of British infrastructure prospects compares unfavourably with the global picture, which two thirds of respondents feel has improved since 2008.However, Britain is still seen as the most attractive country for investment, the experts say, followed closely by America, China, India and western Europe, with Russia and Africa falling far behind. (article continues below)

The survey illustrates the continuing discrepancy between uncertain prospects for infrastructure development in Britain and its potential attractiveness for infrastructure investors.

The British government last week launched the £200 billion National Infrastructure Plan last week to help close this gap and help improve Britain’s long-term growth prospects, in addition to existing short-term infrastructure stimulus.

The coalition has yet to come up with concrete proposals to fulfil much of its £200 billion commitment

However, the coalition has yet to come up with concrete proposals to fulfil much of its £200 billion commitment. Many of the spending plans announced were proposals made under the previous administration, such as national high-speed broadband networks.

The coalition says it is consulting on how to involve the private sector in the plan, but does not expect results until early next year.

Paul Severs, a partner at Berwin Leighton Paisner, says: “In the UK alone the National Infrastructure Plan has highlighted that an estimated £200 billion of infrastructure investment is needed over the next five years. At the moment it is hard to tell where the funding will come from. Infrastructure is a long-term investment and has been an under-valued asset class that has often been overlooked by certain sectors of the investor community.”

Respondents to Berwin Leighton Paisner’s survey saw low-carbon projects as the most attractive for investors, followed by power, then rail and road, then schools and healthcare.