The Association for Consultancy and Engineering (ACE) has produced a paper on how IIT would work, as well as a summary briefing. 

Nelson Ogunshakin, ACE chief executive, said: “The Infrastructure Investment Trust is a very exciting development.  It has the potential to unlock investment and bring funding into projects that cannot be financed through traditional means.”

The report’s recommendations have received a positive response from a select opinion panel, formed as an anonymous focus group.  The group includes representatives from the banking sector as well as institutional investors.  The group supported ACE’s view that that IIT was an effective supplementary model to PFI that would be effective in financing major capital projects.

Nelson Ogunshakin added: “ACE will strongly promote the adoption of IIT in its discussions with HM Treasury and the coalition Government in general. ACE believes that the Government should explore introducing the IIT in the UK as a cost-effective means of channelling finance into infrastructure assets at a time when the public sector is expected to retrench from capital expenditure.”

 -ENDS-

 For press information please contact Simon Goldie on 020 7227 1892 or 07905 279328 – sgoldie@acenet.co.uk

Notes to editors

The report was produced for ACE by Eyediate Solutions.

To read the summary briefing, please click here.

To read the Infrastructure Investment paper, please click here.

ACE suggests

• The Infrastructure Investment Trust (ITT) can provide an effective tool for enhancing investment in the UK’s infrastructure network by providing an optimally efficient regulatory regime to attract investors into the infrastructure market;

• The IIT is a corporate vehicle which pools the capital of investors to acquire, manage and develop income yielding infrastructure assets. It would enable a single tax wrapper for the currently disparate infrastructure space;

• The IIT – modelled on the existing Real Estate Investment Trust (REIT) – distributes most or all of its profits to equity holders removing tax distortions. Thus incentivising an increase in capital flows into infrastructure assets;

• This focus on the investor level can help the UK Government achieve simultaneous public policy goals, notably economic development, sustainability and the localism agenda;

• The IIT has the potential to become the new public private partnership of the 21^st century by opening up the infrastructure market to retail investors; enabling community participation in infrastructure provision; monetising local infrastructure assets and thus freeing up resources for capital investment and also by being a hybrid public-private vehicle for a national infrastructure bank;

• ACE suggests that the Government explore introducing the IIT in the UK as a cost-effective means of channelling finance into infrastructure assets at a time when the public sector is expected to retrench from capital expenditure;

• This approach can help the UK quantitatively ease its £500 billion infrastructure crunch.