The real estate blog: UK tops infrastructure development table

The global infrastructure index ranks 25 countries based on their tax environment, the availability of credit, economic stability, national stability, ease of doing business, level of private participation and sustainability and innovation.

Based on these criteria the UK has came out on top followed closely by Canada, the US, Australia and the UAE respectively.

Infrastructure has become a major priority for the Government after Chancellor of the Exchequer George Osborne pledged £100bn over the next five years dedicated to infrastructure investment. The Government also set up the National Infrastructure Commission (NIC) to provide advice on the country’s key infrastructure priorities. Former Labour MP Lord Adonis, who has praised the UK for topping the table, is chairing the NIC.

“It’s a credit to the positive conditions for infrastructure investment created by the previous and current governments,” says Adonis. “However, it’s paramount that the UK also identifies and secures a good pipeline for investors.

“Without it, the Nabarro Infrastructure Index shows that the US and Canada offer equally attractive conditions for infrastructure investment which could threaten the UK’s number one position.”

Adonis’ belief that the UK needs a strong pipeline of projects reflects similar opinions voiced by those in the legal industry. Ashurst global head of energy, transport and infrastructure Mark Elsey told The Lawyer this week that he believed that no such pipeline existed outside of the power sector in the UK.

According to the infrastructure index devolving decision-making powers makes countries more attractive to investors, with four of the top five ranked firms operating some form of devolved powers. The largest Australian and Canadian provinces operate their own procurement bodies while the UAE runs a system that allows individual emirates to build specialisms. Although the UK’s system differs from these increasing amounts of control has been devolved to national and local government.

“What historically happens in a lot of un-devolved environments,” says Nabarro’s head of infrastructure Kristy Duane, “is that the central government process has no real link to the local area and is therefore not able to make decisions with local buy-in.

“Our thoughts are that devolution and the whole northern powerhouse concept should certainly help the delivery of infrastructure projects in those areas.”

Duane also added that the sector as a whole would benefit from having greater certainty that projects such as roads, bridges and railway lines will be developed. This certainty is likely to be beneficial for contractors as well as Nabarro’s consultancy clients, such as the Arup Group and AECOM.

The index goes some way to explain why overseas investors finance a large number of UK infrastructure projects, a point highlighted in this week’s feature. However, further devolution may allow investors to diversify their portfolio to regions outside of London.

The global infrastructure index

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