Yesterday's Budget announcements contained some good news for infrastructure investors and developers, including increased capital for the Green Investment Bank (GIB) and a new "fast-track" planning process, but the market will have to wait a little longer for details of clear initiatives on a number of the Coalition Government's key infrastructure policies.
Green Investment Bank
The Chancellor yesterday announced plans to inject £3
billion of capital into the GIB, £2 billion more than was
initially proposed last year. This additional investment will be
funded from asset sales, including the sale last year of High Speed
1, the rail link between London and the Channel Tunnel, and the air
traffic control service (NATS). Provided that national debt
reduction targets are met, the GIB will be permitted to leverage up
to £15 billion in private capital from 2015/2016 (for more on
the GIB, click
here and see also the National Infrastructure Plan (link
below)).
The establishment of the GIB has now been brought forward from
2013 to next year and further details on its structure and the
sectors that it will invest in are expected to be announced in
May. However, some may be disappointed that the GIB's
power to borrow will not begin until national debt targets are met,
given the estimated £550 billion of investment needed to
de-carbonise UK energy infrastructure before 2020.
Investment in transport and infrastructure
The Government plans to invest £30 billion in
Britain's transport network over the next four years, an
increase on the last four years. £200 million will be used to
fund the development of high speed rail, including Crossrail and a
new link between Manchester Victoria and Manchester Piccadilly
stations, in line with long-term aims to reduce reliance on
domestic air travel.
More details on Government expenditure on transport and
infrastructure will be set out in the report on the 'long-term
forward view of projects and programmes' for the UK, due in
autumn 2011 as part of the National Infrastructure Plan.
The Chancellor also announced measures to encourage investment in
low carbon and renewable energy infrastructure, including a renewed
commitment to public funding for four Carbon Capture and Storage
("CCS") demonstration plants. These will now be
funded from general taxation and the proposed CCS levy will be
scrapped.
Planning reform
The Chancellor also announced welcome proposals for the
streamlining and simplification of the planning approval process. A
'Major Infrastructure Planning system' will be created to
allow for a fast-track approval process for applications, with a
target duration of 12 months from the start of each enquiry for
determination of such applications.
Plans to shift the burden of proof for planning applications made
for sustainable developments so that the opponents of a scheme will
have to demonstrate good reasons why a planning application should
be blocked will also be beneficial for developers, as will
proposals that planning applications may be made jointly.
Whilst yesterday's Budget provided some reassuring indications
on the Government's commitment to low carbon energy, the GIB
and investment in transport , further clarity on how these
proposals will be incorporated into the National Infrastructure
Plan will be welcome (for more detail,
click here). Infrastructure investors will need to continue to
monitor developments, and reports on the structure and scope of the
GIB (expected in May) and the Government's 'long-term
forward view of projects and programmes' for the UK will no
doubt be eagerly awaited.
This article was written for Law-Now, CMS Cameron McKenna's free online information service. To register for Law-Now, please go to www.law-now.com/law-now/mondaq
Law-Now information is for general purposes and guidance only. The information and opinions expressed in all Law-Now articles are not necessarily comprehensive and do not purport to give professional or legal advice. All Law-Now information relates to circumstances prevailing at the date of its original publication and may not have been updated to reflect subsequent developments.
The original publication date for this article was 24/03/2011.
