The UK should look to a “patchwork quilt” of funding sources and should learn from the French example in funding rail projects, experts told delegates at NCE’s Rail Summit.
KPMG director Jonathan Moseley said that in the future “we are likely to see a patchwork quilt of various sources of private and public funding”. Crossrail is an example of how this could work, he said, referring to its reliance on a combination of government funding, money from the London fare box, private developer funding for stations and enhanced business rates.
European Investment Bank transport sector specialist Neil Valentine said the UK could learn from France’s example in its use of a hybrid form of project finance to fund planned expansions of its TGV high speed rail network.
Project finance is not always the best financing option, said John Laing Investments head of rail Andy Pearson.
“We must remember that project finance is not the only arrow in the quiver, and it’s probably better suited to more discrete types of asset,” he said. Pearson said that, when appropriate, project finance has advantages including protecting public finances and offering more incentive for projects to be delivered on schedule.
Transport secretary Philip Hammond has confirmed the preferred High Speed Two route will follow the previous government’s Y-shaped network.
This will connect London with Birmingham with branches to Manchester and Leeds. It is also expected to cost £3bn more than the previous £30bn estimate as it includes the Conservative-favoured link to Heathrow Airport..