Infrastructure market update: The Major Infrastructure Unit - putting democracy back into decision making

August 2010

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Introduction

Once a fortnight we give a number of our key clients an update of the PPP projects being tendered in the UK. This allows you to track the procurement process of projects relevant to your business. We also include a topical analysis, different each time, of important market developments.

This week’s focus is on ‘The Major Infrastructure Unit - putting democracy back into decision making’.

In view of the present lack of PFI projects we have provided you with other Infrastructure procurement.

The Major Infrastructure Unit - putting democracy back into decision making

Following our April update on the Infrastructure Planning Commission ( IPC ), the coalition government have confirmed plans to set up a Major Infrastructure Unit to deal with large-scale infrastructure projects and abolish the IPC which was established under the Planning Act 2008 in order to speed up applications for major projects by providing a fast-track one-stop-shop “development consent order”. We understand that the change is likely to take place in April 2012.

Proposals to redress a perceived “democratic deficit” were a recurring theme in policy debate leading up to the election in May 2010 as was the question of whether planning powers should continue to be exercised at a regional level, as advocated by Labour, or devolved to a local level, as proposed by the then opposition. In a letter to developers, Michael Pitt, chairman of the IPC, stated that the government wanted to bring forward primary legislation to replace the IPC with “fairer, faster decision making” and an “efficient and democratically accountable fast-track process for major infrastructure projects”. The legislation will take the form of a Decentralisation and Localism Bill, which the government hopes will become law in 2011.

The new proposals

Whilst the expertise, processes and special character of the IPC will be retained under the proposals, the Major Infrastructure Unit will form part of a revised Communities and Local Government structure that includes the Planning Inspectorate. All decisions of this unit will have to be ratified by the Secretary of State and National Policy Statements ( NPSs ) will be subject to a parliamentary vote rather than just debate as at present. Part of the rationale behind these policies is to reduce the likelihood of legal challenges to decisions by removing the final decision from the new Major Infrastructure Unit.

Business implications

Until the IPC is formally abolished the current situation will continue. If an application reaches the decision-making stage and a NPS  is in place then the IPC will make the decision. However, if a NPS is not in place when the application reaches the decision-making stage, the IPC will make recommendations to the Secretary of State, who will have the final say. As its successor body will operate in much the same way as the IPC, it is anticipated that the handover from one body to the other should be relatively smooth. Developers who are working towards the submission of an application are unlikely to notice very much practical difference in the procedures apart from potentially having to wait an additional period of time while the Secretary of State considers his final decision.

Developers’ efforts for the moment need to be directed towards ensuring that there is a relevant NPS which supports any proposals they propose to put forward. There is under the IPC, and will continue to be under the Major Infrastructure Unit, an effective presumption in favour of development which is in accordance with a relevant NPS, so it will be an enormous advantage to developers in having a supportive NPS in place. A number of NPSs are either out to consultation or shortly will be.

For more information please contact Nigel Hewitson of Norton Rose LLP.

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Latest projects to be tendered

Project detailsContactDeadline for request for proposal
Somerstown regeneration PFI
Portsmouth City Council invites construction contractors to bid for the Somerstown regeneration round 6 PFI project, either as a lead bidder or as a primary consortium member, to take part in a market consultation exercise.
Portsmouth City Council PIN
Hertfordshire County Council highway service term contract
Hertfordshire County Council service team is seeking a contractor to undertake the following:
Surface works, foundation work for highways, roads, streets and footpaths, highway maintenance work, repair maintenance and associated services related to roads and other equipment, architectural, construction, engineering and inspection services, highways engineering services, construction work for bridges, bridge-design services, gully cleaning and emptying services and installation of traffic lights.
Martin Jaques 13 September 2010
BAA Construction Project Management Services – Stansted
BAA Construction Project Management Services have issued on behalf of Stansted Airport Limited, a tender seeking project management services with regard to capital construction projects at Stansted Airport.
Michael Walker 15 September 2010
Sludge Transportation & Waste Services
Scottish Water wishes to appoint contractors to provide Sludge Transportation & Waste Services across Scotland which utilise both conventional and innovative solutions.
Michael Walker 30 August 2010
Construction and regeneration framework
London & Quadrant wishes to establish a Construction and Regeneration Framework for the delivery of a substantial proportion of their development programme, excluding Section 106 schemes. Framework Members are to provide building works and services to enable the delivery of new build, refurbishment, mixed use, and mixed tenure schemes in both rural and urban environments.
London and Quadrant Housing Trust Limited 16 September 2010

For further information, please contact:

Jo Patrick

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