UP TO £200 billion (€225 billion) is to be spent on upgrading the United Kingdom’s infrastructure, including roads, railways and utilities, over the next five years, mostly with private investment, according to British prime minister David Cameron.
The plan, which will be backed with less than £50 billion state funding, will “completely update and modernise” infrastructure, leaving the UK “free to compete with the rest of the world”, Mr Cameron told the Confederation of British Industry yesterday.
If implemented, the national infrastructure plan will create opportunities for Irish construction firms, many of which have increased the size of their UK operations in the wake of the industry collapse in Ireland.
The challenges facing the UK were highlighted by a treasury document released after Mr Cameron’s speech, which warned that parts of the UK’s infrastructure are “ageing and are becoming outdated”.
“Much of the UK’s existing infrastructure was built during the 19th century,” it said. “For example, 40 per cent of London’s water mains are over 100 years and 12 per cent are more than 150 years old. The average age of sewers in England and Wales is 63 years.”
Painting a deeply negative picture, the treasury’s document, National Infrastructure Plan 2010, said: “For several decades the UK’s approach to infrastructure investment has in general been timid, unco-ordinated, incremental and wasteful in its procurement and insufficiently targeted to supporting balanced and sustainable growth in the economy, both economically and environmentally.
“The result is that our infrastructure is ageing, plans are unclear and costs are too high. In 2010 we face an unprecedented series of challenges.”
It highlighted construction costs. “Today, the UK is one of the most expensive countries in which to build infrastructure. For example, civil engineering works cost some 60 per cent more than in Germany.” Labour and construction plant costs were “broadly comparable” with European norms, but the costs of UK aggregates may be more than 25 per cent higher, while its planning rules also added to final bills.
The ambition to improve the planning system is likely to run into difficulties from another key element of the Conservative- Liberal Democrat programme for government: the plan to give local communities greater control over what happens in their areas.
Mr Cameron said that road congestion alone cost the economy £20 billion a year, while railway delays added £1 billion. “For too long, we have postponed difficult decisions – and it shows.”
Emphasising the need for speed, he said: “China is building tens of thousands of miles of road, a new network of intercity railway lines and a dozen or so nuclear plants. While they have been moving forwards, we have been standing still.”
An Organisation of Economic Co-Operation and Development inquiry found that capital spending between 1970 and 2005 on roads, rail and electricity generation had a stronger impact on economic growth than any other type of investment.
Most of the spending in the five-year plan would come from the private sector “where necessary, helped by suitable regulatory change”, along with levies and State-imposed pricing rules in areas such as renewable energies.
