The organisation, which has a remit to act in the public interest through its Royal Charter, says that PPPs need to be seriously considered as a means of meeting Northern Ireland’s infrastructure challenge.
A report launched by RICS, which was carried out by a research team from RICS and the University of Ulster, says that PPPs are the most credible and recognised source able to make up the shortfall in infrastructure investment.
RICS has brought together local property and construction professionals to seek views on the subject and is now calling for the Northern Ireland Executive to put priority on raising awareness of the potential opportunities that PPPs present.
RICS Northern Ireland Director, Ben Collins says: “It is vital that investment in infrastructure in Northern Ireland is increased. This is essential for Northern Ireland to become more competitive and to be able to continue to attract highly valuable inward investment. The first priority should be for the Northern Ireland Executive to move more money from current to capital spending. But the research supports PPP as an additional viable solution to the current infrastructure investment deficit and RICS is also calling on the Northern Ireland Executive to play its role in raising awareness and understanding of the potential benefits of PPP for all parties involved.”
“PPPs have had something of a bad name due to a small number of high profile projects, but when implemented well they have become recognised as an important solution globally and have the potential to enable Northern Ireland to make investments in schools, hospitals, transport and other infrastructure that otherwise might not be possible. The report that RICS has published presents examples of where PPP projects have been successfully implemented and is intended to help promote best practice.” he adds.
Professor Alastair Adair, RICS member and Pro Vice Chancellor of the University of Ulster, highlights a recent Northern Ireland Audit Office report on Future Impact of Borrowing and Private Finance Commitments: “The recent Northern Ireland Audit Office report concluded that there is scope for further efficiencies in PFI/PPP contracts through a strategic approach to provision of benchmarking and market testing information. The RICS report draws on global best practice to demonstrate how other countries have reformed PPP to deliver such efficiencies. Northern Ireland needs to take cognisance of global best practice in PPP to deliver modern infrastructure requirements to stimulate growth and underpin our economic competitiveness.”
The PPP model has been increasingly advocated in response to the infrastructure investment challenge since the global financial crisis. Worldwide, there have been 1,376 PPP projects across 40 countries, with a combined capital value of circa US $485billion from 2005 to 2012.
A copy of the RICS Report: Global infrastructure challenge: The role of PPP in a new financial and economic paradigm can be found at: www.rics.org/infrastructurechallenge
Authors of the report are from The University of Ulster and The University of Aberdeen.
In the UK, the findings highlight a funding gap of close to £500 billion (Institute of Directors, 2010) despite the quality of the country’s infrastructure being considered deficient compared to the rest of Europe by nearly two thirds of businesses (Confederation of British Industry, 2012 research). This clearly demonstrates the desperate need for a financial injection into the UK’s infrastructure to ensure the economy as a whole remains competitive internationally.