Conservative London Assembly members have suggested using a US-style trust to plug infrastructure funding gaps.
Their Burrowing for Success report proposes a system where private investors would part-fund construction projects with a return paid through shared savings or revenue streams. The public sector would still contribute towards the schemes and would own and operate them.
“We need to keep building roads, power supplies and buildings, and get creative when it comes to finding the cash for these projects,” said report author and Greater London Assembly Conservative budget spokesman Gareth Bacon.
“Take the [proposed] Silvertown Tunnel, which we so badly need to ease congestion in the east of London. Transport for London is limited on what it can borrow by the Treasury, and with demands from Crossrail eating up its commitments, we need to find other ways to attract the investment. Under a US-style infrastructure trust, return for private investors would be 10%, far higher than government gilts.
“This type of package would be snapped up by pension funds and the city. Unlike PFI the risk is shared and ownership remains with public bodies.”
The report says Chicago, has an infrastructure trust with a board made up of business people and politicians. It has already completed an energy retrofit project worth US$12.2M (£7.8M).