Reducing the costs infrastructure networks impose on each other

The UK has an ambitious pipeline of infrastructure enhancements, representing investment of over £300 billion in infrastructure projects across the economy as a whole. The scale of this challenge is huge, and to succeed, we need a co-ordinated and supportive response from economic regulators to ensure value for money for consumers.

Regulated utility networks play a vital role in our economy, ensuring that consumers and business get reliable access to essential services. Regulated utilities are also stewards of our national infrastructure, and many recognise the responsibilities this brings, not least where large parts of the UK’s economic activity are highly dependent on the quality and reliability of infrastructure.

A key area of concern when undertaking an infrastructure project is how to work around, or interact with, the assets and infrastructure of other utilities such as existing pipes, wires, road and rail networks. This can pose a significant cost and our research estimates that it could represent a cost of nearly £13 billion by 2020. The processes for infrastructure projects to ‘interact’ with those assets already in the ground is the focus of a consultation published through the UK Regulators Network (UKRN).

UKRN research has found cases where the ‘frictional costs’ of dealing with existing utility networks can be too high. This is often down to simple issues of clear communication, reliable service standards and clear expectations. The paper proposes some practical measures to help address this.

The consultation proposes five basic principles, to help make clear to clients and networks what to expect when planning and managing interactions with other networks:

  • Recognising the stewardship role that utility networks play
  • Acting efficiently and economically
  • Being transparent about the practices and process for interactions
  • Having clear pricing
  • Continuously improving services to clients

We also want greater transparency though a regular public report by networks, demonstrating how they’ve met clients’ needs and encouraging on-going improvement.

We think that our proposals could be adopted more widely by non-regulated operators of significant national or regional infrastructure: the key to success here is in recognising the mutual inter-dependence between infrastructure and successful delivery of projects, whatever their scale.

(Photo: Pylons and power cables across a road in Barking. © Copyright David Anstiss and licensed for reuse under this Creative Commons Licence.

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