Public procurement is putting off investors

9 September 2011





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11 September 2011 | Adam Leach

“Stop-start procurement” risks undermining private investment for UK infrastructure projects, a report has found.

Making the right connections, published yesterday, found that of the 477 global companies quizzed just 26 per cent see the UK as an appealing market for infrastructure investment. The report, which was conducted by KPMG on behalf of the CBI, outlined a number of issues that are deterring private investors, both domestic and foreign, from putting funds into construction projects.

One of the main deterrents, according to the report, is the government’s track record of “stop-start procurement”. The report cited the example of the procurement of rolling stock for Crossrail, which was postponed last month so that a government review into the procurement process can be completed, as having the potential to put off prospective investors.

Furthermore, the report claims that “periods of political uncertainty” during major infrastructure projects leave little room for confidence about getting a return from long-term investments. The CBI called on the government to develop a clear and strong procurement plan to inform potential investors and put their minds at ease.

John Cridland, director general, CBI, said: “The UK is still a long way down the international infrastructure league table and languishes behind key competitors. So, if we are serious about boosting exports especially in emerging markets, and achieving sustainable growth, the government must put infrastructure investment firmly at the top of its agenda.”

Despite being criticised in the report, the government can draw strength from the news that it moved up in the World Economic Forum’s country rankings concerning the quality of infrastructure. This year the UK came in at 28th place compared with last year’s ranking of 33rd. However it is still ranked below both France and Germany.

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