Government needs to confront deficit in Northern Ireland infrastructure, says expert

Out-Law Analysis | 25 Oct 2016 | 3:14 pm | 2 min. read

FOCUS: Coming on the same day as the National Needs Assessment (NNA) set out its grand vision for the future of UK infrastructure, the news that a vital £165 million Belfast road scheme had been suspended was a particularly bitter disappointment.

As EU funding becomes less certain in the run-up to the UK's exit from the trading bloc, it is vital that the NI Executive become open to alternative revenue-raising mechanisms, in order to ensure that vital projects of this nature can proceed with the minimum of delays.

According to infrastructure minister Chris Hazzard, the Brexit vote has already impacted on plans to pursue EU funding for the York Street Interchange scheme. Announced in 2015 but six years in the planning, the new bridges and underpasses making up the scheme had been expected to access 40% of the necessary funding through the Connecting Europe Facility funding stream.

While the chancellor has guaranteed money awarded to "good value" UK projects by the EU structural funds up to the date the UK leaves the trading bloc, these assurances are unlikely to assist York Street. As Hazzard explained last week, the next call for major Connecting Europe Facility project applications is not expected before early 2018 - which means a final decision is unlikely before the UK leaves the EU in 2019.

Public statements by Hazzard confirming the delay pointed to the NI Executive's competing priorities, including its four "flagship" infrastructure projects: the Belfast Hub and Belfast Rapid Transit schemes, as well as improvements to the A5 and the A6. Anything else would have to be decided based on "the scale of resources available from the forthcoming budget process", he said.

The Sunday Times reported last week that Belfast is now the third most congested city in the UK, while the NNA itself highlighted the problems that had been caused by "years of underinvestment" in Northern Ireland's roads – and, ironically, the "improved connectivity and economic boost" that swift completion of the York Street Interchange project would bring to the country.

While the looming prospect of Brexit presents particular challenges for funding, there is a need to act now - as the minister said himself, 60% of the funding for the York Street Interchange would have had to have been accessed from other sources, in any event.

The NNA's recommendations are aimed at the National Infrastructure Commission (NIC), where the day-to-day work will be focused on England-only infrastructure as well as those areas reserved to the UK government. However, there are lessons to be learned for the NI Executive too. The report's conclusions on transport, energy and flood defence in Northern Ireland were based on extensive industry consultation, as well as a workshop and evidence-gathering session held at the offices of Pinsent Masons in Belfast. And many of the drivers of Northern Ireland's infrastructure needs - as well as the challenges - are the same as those of elsewhere in the UK.

The question, as always, is how we pay for it. The NNA touches on this as part of its report, and the prospect of tolling based on road use and travel patterns to fund road infrastructure raises its head as one of its formal recommendations to the NIC. Tolling has always seemed like a politically unpopular choice - but as the authors of the report point out, the growth of on-demand services such as Uber mean people are becoming increasingly used to paying for services in different ways.

With the political will behind it, domestic water charging and government asset sales could also open up new opportunities for infrastructure finance. With Brexit on the horizon, there is little time to waste.

Adrian Eakin is an expert in major projects at Pinsent Masons, the law firm behind Out-Law.com.