Building a new infrastructure delivery team

Original news

Two current government bodies—Infrastructure UK (IUK) and the Major Projects Authority (MPA)—are to merge, creating the new Infrastructure and Projects Authority, the Cabinet Office and HM Treasury have announced. The new body will have responsibility for managing and delivering major economic projects and will come into formal existence on 1 January 2016.

How will the establishment of the new IPA affect the project finance landscape in the UK? What does it mean for PPP/PFI/PF2 going forward?

The merger of the combined IUK and MPA teams into the new IPA is intended to send a message that infrastructure is right at the heart of the government’s agenda.

The IUK team have a wealth of private sector investment experience and, importantly, finance expertise. They advise on most complex deals on the government’s to-do list. What makes it a dynamic team is its closeness to the Treasury’s spending decisions, so keeping a reporting line to the Chancellor will be vital for the new team.

The MPA team has traditionally been more focused on procurement and looking at governance, robust decision making and business case analysis—the economics of why a project may be undertaken. The MPA also oversees major projects during the delivery phase. Recently it brought in additional private sector expertise to help streamline project procurement and to focus on securing a reduction of the cost of services to the taxpayer. Under Francis Maud’s leadership it did manage to secure some short-term savings.

Announcing the merger of the two teams is aimed at giving the infrastructure project industry a boost. However, the key determinant for the success of the new combined team will be the speed with which the government can procure the big projects it needs to energise the economy