Media Briefing Note: Infrastructure in the Autumn Statement
05 December 2012
LONDON, 5 December 2012 - Commenting on the impact of the Autumn statement, Adrian Walker, Head of Hogan Lovells' infrastructure and PF2 practice, said:
"The focus on infrastructure in the Autumn statement is welcome and overdue. The specifics have been trailed for some time now and, to draw an analogy with the financial markets, have been "priced in" to market expectations. Whilst some of the detail is likely to be unsavoury to the private sector, if PF2 is the only show in town, the private sector will find a way to make it work.
The one thing missing from the statement though is perhaps the most crucial: there is still a lack of detail on the pipeline of deals that the new regime will be applied to. That information is what the infrastructure market really wants to hear."
Andrew Briggs, Head of Government policy within Hogan Lovells' infrastructure and PF2 practice added:
"One of the big changes is the initiative for Government to take equity stakes in PF2 companies, and appoint directors to their boards. This has been done before and, despite the complexity it adds to the process, we expect the market to make it work if that is the price of being in the PF2 game.
We expect the market will enthusiastically embrace the commitment to reduce bid costs, by introducing more rigorous standardisation and seeking to limit the process timetable. This has been long overdue.
The other thing on our Christmas list is for the Government to be more transparent and supportive of the PF2 industry. A PF2 project does not mortgage future generations, but rather allows taxpayers to pay for public services as they are used. It achieves immediate investment, job creation and infrastructure delivery. And it avoids burdening the current generation with excessive upfront costs. PF2 projects are not "disastrous" (to quote John Humphries) but represent best value for money in the majority of cases – this is according to the Government's own accountants. It would be good to have this message heard loud and clear."