The UK has moved up four places since 2012 to reach ninth in the latest Global Infrastructure Investment Index from consultants Arcadis, which ranks the markets that are most attractive to both public and private investors.
This is the second year in a row the UK has risen up the rankings after being placed 10th in the last index in 2014.
The UK market is becoming an increasingly attractive for infrastructure investment, thanks to its low risk business environment, although the EU referendum is a ‘cloud on the horizon’, according to consultants Arcadis.
Britain has moved up four places to ninth since 2012 in the company’s latest Global Infrastructure Investment Index, which ranks the markets that are most attractive to both public and private investors.
The UK has reiterated its commitment to major infrastructure projects
The report points out that ‘the UK has recently reiterated its commitment to major infrastructure projects,’ citing schemes such as HS2, Crossrail 2, and HS3.
However, it says ‘setbacks’ prevent Britain being in the top five most attractive markets. In particular investors dislike the prolonged and ‘highly politicized’ process that accompanies decisions on infrastructure.
According to Arcadis, investors welcome the creation of the National Infrastructure Commission as a way of separating infrastructure from party politics.
The devolution of transport powers and the resulting regional investment programmes presents opportunities outside London, the report states.
However it adds: ‘Delivering major infrastructure projects will be a new proposition in some areas and structural support may be required’.
As a ‘good example of a well-structured “bankable” project that appealed to institutional investors,’ the report cites Thames Water’s £4.2bn, 25km Thames Tideway Tunnel ‘super-sewer’, where ‘the cost of capital was competitively tendered, incentivising the concessionaire to seek the lowest possible interest rates’.
The report says a number of elements of this model will be used in other UK projects, such as future airport runway schemes, although the exact model is unlikely to be replicated.
Overall Singapore remains the world’s most attractive infrastructure investment market, followed by Qatar and UAE.