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The Association for Consultancy and Engineering (ACE) is calling for a new method of accounting to encourage investment in infrastructure. In a new positioning paper, ‘Avoiding an infrastructure crunch’, ACE is suggesting that the government explores ways of establishing a regulatory asset base (RAB).
The RAB allows investors a fixed return on their venture in addition to depreciation allowances which in effect represent the eventual return of capital. This reduces investor risk through a fixed regulatory framework and more transparent average costs of capital. These lower costs of capital could save billions of pounds.
Nelson Ogunshakin, ACE Chief Executive, said: “This would encourage extensive investment by pension and insurance funds that are looking for secure long term yields. The RAB can then be understood as a more efficient long term “infrastructure contract” which defines the obligations of all parties and could encourage a balanced and mutually beneficial approach to investing in the UK’s infrastructure network.”
The report also calls for an infrastructure stimulus that includes tax breaks and ways to encourage investment. This approach would help drive forward economic development and business growth.
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For press information please contact Simon Goldie on 020 7227 1892 or 07905 279328 – sgoldie@acenet.co.uk
Notes for editors
To read the full report: Avoiding the infrastructure crunch, please click on this link
To read ACE’s position paper: A UK Infrastructure Bank, please click on this link
To read ACE’s on creating infrastructure gilts, please click on this link
To read ACE’s call for an infrastructure accounting, please click on this link
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