UK infrastructure delivery: an interview with Graham Soar, Burges Salmon

A video interview on how we can improve the delivery of UK infrastructure. Topics include: financing infrastructure projects and how the UK government can attract investment.

11 July 2017

We are conducting a series of video interviews with infrastructure industry leaders and key decision makers to gather Perspectives on infrastructure.

Our latest video interview is with Burges Salmon project finance expert, Graham Soar. Graham discusses how to tackle the challenges facing the infrastructure sector and how to improve the delivery of UK infrastructure projects. Listen to what he has to say in this video.

Video Transcript

Dispelling a myth about infrastructure project finance (0:07 – 0:36)

The message the we get from financiers is that it really is a myth that there isn't private finance available for infrastructure in the UK – you've got banks, investment funds, institutional lenders. You've got insurance companies and pension schemes. They've all got lots of capital to deploy and they want to deploy it in the medium-to-long term and they want to get the right kind of balance of risk and reward. They would argue that exactly the opposite is true: there actually aren't enough projects for them to finance.

Finance vs long-term funding (0:36 – 1:19)

I think it helps to think about long-term funding as different to finance. You can use the words interchangeably but when I think about long-term funding and when our clients, our sponsors and institutional lenders think about it, what they're really talking about is who pays for it in the long term. And that's pretty much always you and me. It's the taxpayer. So through our taxes or the consumer, for example if you pay for toll roads or through your energy bills. And whether there's enough money to pay for things in the long term is really a question about how the economy's doing so macroeconomic factors are much more important and also whether that particular piece of infrastructure is particularly desirable or needed in the UK.

The role of the UK government (1:19 – 2:07)

Everybody knows that it's government which ultimately sets the agenda for what infrastructure the UK needs and what it ends up with. It also makes the decision about how that is funded in the long term and how it's financed in the short term and there are some categories of projects, like roads, which the government seems perfectly happy to fund directly but those could be financed by the private sector. Those might provide the right kind of level of risk and reward. Now query how long Treasury is going to keep on writing big cheques for. And then there's another category of project, such as renewable energy, that has been successfully financed in the private sector for many years now and that's because the private sector understands the risks and rewards there and there is the right level of return and the government has supported that through subsidy.

What can the government do to attract investment? (2:07 – 3:00)

But right now there's this other category of project which the government seems to want the private sector to finance but it's quite innovative – it's groundbreaking and if the government wants the private sector to finance those then it's going to need to provide the right level of support for those. And what kind of support might it provide?

Well, we need political and regulatory stability. No-one wants to invest in this kind of project and then find the rug pulled from under their feet in four or five years' time. We've got a pretty good history of that in the UK. The rule of law is well-established but we need to maintain that political stability that makes us an attractive jurisdiction for infrastructure investment. And then there also needs to be financial support. Some of this innovation is inherently so risky that it will only offer the right balance of risk and reward with some government support.


For more perspectives on infrastructure, read our industry report featuring 13 in-depth interviews with industry leaders and key decision makers in the infrastructure sector.

Perspectives on infrastructure

We need political and regulatory stability. No-one wants to invest in this kind of project and then find the rug pulled from under their feet in four or five years' time.
Graham Soar, Burges Salmon

Perspectives on infrastructure

Perspectives on infrastructure

How can we improve the delivery of UK infrastructure? Views from industry leaders and key decision makers, along with survey results from 1,651 members of the general public.
Read report