On Monday, Engineers in the UK advised George Osborne, UK Chancellor of the Exchequer, to use Tuesday’s emergency budget to ensure the government’s planned Investment commitment in the Green Investment Bank is reaffirmed. The engineers requested the Chancellor to offer government commitment and assurance that the Bank will attract the vital investment required in the country’s infrastructure.
In its Budget submission, the Institution of Civil Engineers (ICE) submitted that the setting up of a thorough and determined infrastructure bank that is able to bring in huge amounts of private investments is key to ensuring that vital projects are continually built in spite of the biting financial times and budget deficits.
The ICE noted that the Setting up of the Green Investment Bank marked a good beginning, with Infrastructure UK, a government body, working over time to flesh out its plans, however, the scale of the task at hand must be put into consideration to ensure the Bank is sufficiently robust and ambitious, Tom Foulkes, ICE Director General said.
Infrastructure UK approximates about £40 billion to £50 billion per annum of investments is needed in infrastructure for the country to ensure its future economic competitiveness and aid the shift to a low-carbon economy. According to the engineers association, ICE State of the Nation- Infrastructure 2010 report, the UK’s infrastructure is currently in a poor situation and needs further investments. The Green Investment Bank was an idea began by the Labour government, for which it had made a commitment with an initial funding of £2 billion and even though it quickly became a part of the new Coalition government’s agreement, its remit and operation are yet to be decided.
According to the ICE, a rationalized planning system is crucial in attracting private investment and reducing risk on projects, whereas lengthy planning processes, like the overdrawn Heathrow Terminal 5 decision that took seven years, might only add unnecessary risks and costs to the projects.
Financing and planning should be done simultaneously and the UK government has to ensure that reforms to the planning system are focused on the right path that helps create the right environment to attract investors, Foulkes said. The UK’s energy infrastructure is direly insufficient and the ICE predicted that unless huge investments are made to ensure future electricity generation meets demand, the situation as it is currently will not be sustainable beyond 2015. The ICE reported that the UK’s water, waste, transport, flood and energy systems are all in need of ‘serious attention’ and will need £40bn to £50bn worth of investment each year until 2030.
June 21, 2010.