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UK infrastructure outperforms Europe on attractiveness for investment

Top 10 infrastructure investment locations

A new league table of the most attractive markets in the world for infrastructure investment shows the UK entering the global top 10 for the first time. The research by consultant ARCADIS shows the UK moving from number 13 when the research was first carried out in 2012, to number 10 in 2014.

This compares to a decline in attractiveness in other European markets with the Netherlands, Austria, France, Spain, Turkey, Poland, Portugal and Italy all falling in the index. In Europe only Sweden and Norway are considered more attractive than the UK at 5 and 6 in the table, however their positions are unchanged since 2012.

To remain attractive ARCADIS warned that the UK must deliver on its pipeline promise, and said that other more attractive markets in Asia and the Middle East provide more clarity over their infrastructure development plans. 

The report used five key building blocks to create the league table including economic profile, business environment, infrastructure quality and needs, financial environment and political risk. The UK showed significant growth across four of the five indicators leading to its rise through the table.

This is despite a lack of progress on several major projects particularly in the energy sector (see further evidence from EY quarterly index). "Investors remain frustrated by a lack of long term clariy on infrastructure policy from government which expresses political intent but refuses to back this up with action," states the report. "Investment in energy projects and aviation has stalled due to the political paralysis which threatens not only the UK’s international competitiveness but also its ability to “keep the lights on” post 2015 as its ageing power stations are decommissioned."

It goes on to say that politicians have shied away from making policy decisions because they know that this will increase the costs to consumers, regardless of the models implemented to finance the much needed new assets. In addition, it says that the regulatory model in key sectors is becoming overly prescriptive.

To remain attractive the consultant warned that the UK must deliver on its pipeline promise, and said that other more attractive markets in Asia and the Middle East provide more clarity over their infrastructure development plans. “The USA and the UK entered the top 10 of the ranking for the first time through improvements in their economies as well as the growing need for investment in infrastructure,” said Rob Mooren, global director of infrastructure. “However, both countries must work hard to attract private investment funds when competing against countries that provide more clarity over government infrastructure policy and are able to act on their promises to deliver major projects.”

In terms of the most attractive markets Singapore topped the table for the second time, followed by Qatar. The UAE moved into third position overtaking Canada which was fourth (see graphic).

The research comes just weeks after the UK Treasury announced it was seeking investment for a list of projects across the UK in its “Investing in UK Infrastructure” report. Focused on renewable energy, ports and major projects such as a hospital and a racing circuit in Wales, the report outlined opportunities to invest in schemes worth £15bn. 

If you would like to contact Bernadette Ballantyne about this, or any other story, please email bernadette.ballantyne@infrastructure-intelligence.com:2016-1.