This presentation was made by James BALLINGALL, United Kingdom, at the 11th Annual Meeting of the OECD Network of Senior PPP and Infrastructure Officials held at the OECD, Paris, on 27 March 2018

1. Prioritisation, Preparation
and Delivery of Public Investment Projects
A UK perspective
James Ballingall
Infrastructure and Projects Authority
27th March 2018

2. 2
The Challenge
The Global Infrastructure Gap
Today more of a spending than a funding issue.
The Challenge
Infrastructure is vital to a country’s
prosperity and as an enabler of economic
growth and poverty reduction, but there is
global infrastructure ‘gap’.
A critical problem is the lack of properly
developed, bankable projects that
investors have confidence in.
In addition: inefficiencies in the project
development process, such as:
• Poor project selection, preparation
and appraisal,
• Implementation and delivery, and
• Monitoring and evaluation,
can result in only a fraction of public
investment translating into productive
infrastructure.
The current infrastructure spend required is
estimated by McKinsey to be $3.3tn globally
per annum
The shortfall – the infrastructure ‘gap’ - is
11per cent of that p.a, or $350 billion,
amounting to $5.2 trillion over the period
2016 – 2030
Funds under management are $120 trillion
$350
billion
$5.2
trillion
Infrastructure Planning, Delivering and Managing Major Projects

3. 3
The Methodologies – infrastructure planning / business case development
The approach - Develop new methodologies for international use based on best practice
Disseminate - with support of the multilaterals, G20 and the international community.
Project Initiation
Routemap
How do we set
ourselves up to
deliver it?
5 Case Model
How do we
demonstrate
transparency in
investment and
quality in delivery?
Building
Information
Modelling
De-risk delivery and
improve whole-life
outcomes
National
Infrastructure Plan
What is it we are
trying to deliver?
PPP
Value for
Money
tests
Business case
Methodology
Project Initiation Route
Map
National Infrastructure Planning
Creating a sustainable infrastructure
model.
Methodologies – building blocks
Infrastructure Planning, Delivering and Managing Major Projects

4. 4
This will help match infrastructure demand to investor requirement. The
key benefits this will deliver to countries are:
Infrastructure Planning, Delivering and Managing Major Projects
What will this achieve?
Planning
• Improved planning and
selection of key
infrastructure projects
Preparation
• Systematic development of
credible business cases, plus
tested investment and quality
control regimes
Delivery
• Practical project launch
and delivery
mechanisms

5. 5
Vision/
organisational
ethos
Portfolios
Programmes
Projects
Hierarchical level ‘Product’
Project business
case (SOC-OBC-
FBC or BJC)
Programme
Business Case
(PBC)
Strategy
document
Manifesto/
prospectus or
vision document
Delivery pyramid
Planning applies at every level
Infrastructure Planning, Delivering and Managing Major Projects

6. 6
HM Treasury
(HMT)
National Infrastructure
Commission (NIC)
Executive Agency of HM Treasury to:
● Define long-term vision
● Analyse long-term infrastructure
needs
● Conduct thematic and sectoral
studies in depth
● Issue impartial and independent
recommendations
Ministry of Economy and Finance in
charge of:
● Define public policies
● Establish budget frameworks
● Encourage private investment in
infrastructure
● Maintain a stable regulatory
framework
Center of Expertise of HMT and CO in
charge of advising and supporting in:
● Implement public policies on
infrastructure
● Plan and prioritize investment
programs
● Execute, Finance and Evaluate
infrastructure projects
● Monitor and improve system
performance
Infrastructure and Projects
Authority (IPA)
Institutional Infrastructure Framework of the United Kingdom
- Main actors and their roles
Infrastructure Planning, Delivering and Managing Major Projects

7. 7
What is a National Infrastructure Plan?
• It is a coherent strategy for the development of a country’s
infrastructure networks over the medium to long term.
• A National Infrastructure Plan is more than just a collection of
projects.
• It should set out where you are…..
• where you wish to get to (and why), and
• how you intend to get there.
• Very few countries have such plans:
• Hard to reconcile with the short term political cycle
• Hard to reconcile with economic and political instability
NEED BUILD CONSENSUS TO BREAK THE POLITICAL CYCLE
Infrastructure Planning, Delivering and Managing Major Projects

8. 8
What the UK Plan Looks Like :
A Long-Term Plan to 2020 and Beyond
The UK plan sets out a long term vision for each infrastructure sector and a shorter term plan for the
next 10 years - providing a platform for furthering other policies.
Infrastructure Planning, Delivering and Managing Major Projects

9. 9
Prioritisation Criteria for the UK
The prioritisation criteria in the first 2011 plan in the UK were:
1. Potential contribution to economic growth (productivity and
innovation);
2. Nationally significant investment that delivers substantial new or
enhanced infrastructure performance;
3. Projects that attract or unlock significant private investment.
• This established a shift of emphasis towards investment in
economic infrastructure (for its ‘multiplier’ growth effect) – while the
emphasis previously had been more on social infrastructure.
• Prioritisation principles are never wholly scientific however, and
there is always an element of political choice.
Infrastructure Planning, Delivering and Managing Major Projects

10. 10
Underlying Principles for a Plan: UK
Infrastructure Planning, Delivering and Managing Major Projects
• BUT : In the United Kingdom’s Infrastructure Plan, the touchstone was
always ‘value for money’ – this did not necessarily mean building new
infrastructure.
• There was a threefold approach:
1. Maintaining good performance through planned maintenance and
smarter use of assets;
2. Addressing weaknesses through targeted action to tackle network
stress points and develop networks;
3. Transformational large-scale capital projects.
• Underpinning principles for this were:
1. Needs analysis;
2. Infrastructure resilience – against both natural and terrorist shock;
3. Infrastructure interdependencies (between assets and between
networks).

11. 11
Monitoring and monitoring
of programs and projects
Promotion and attraction
of foreign investment
Development of
execution plans by 2020
Planning and
prioritization of capital
investment
and
Development of
sectoral portfolios
Infrastructure Planning, Delivering and Managing Major Projects
Different Functions : Different Audiences

12. 12
How to develop infrastructure projects:
Structuring, evaluation and approval of projects
Financial
Management
Commerical
Strategic
Economic
The 5 Cases model is a multidimensional
methodology for the preparation,
evaluation and approval of investment
proposals, including infrastructure
programs and projects. Its objective is that
all approved projects are necessary,
desirable, bankable, affordable and feasible
Is the project
feasible with the
resources in time,
money and
personnel that the
authority has?
Is the project financially
affordable?
Is the project bankable
commercially?
Is the project
desirable in
terms of VFM?
Is the project really
necessary?
Infrastructure Planning, Delivering and Managing Major Projects

13. 13
The 2017 edition of the National Infrastructure and
Construction Pipeline can be found
at:https://www.gov.uk/government/publications/national-
infrastructure-and-construction-pipeline-2017
The Pipeline can also be found on an interactive map
on this site: https://www.building.co.uk/the-national-
infrastructure-and-construction-pipeline/map/
Infrastructure Planning, Delivering and Managing Major Projects
Where and when to develop infrastructure:
Planning and prioritising programme investment
English

14. 14 Infrastructure Planning, Delivering and Managing Major Projects
How to measure and improve the performance of the system:
Measurement, improvement and transformation of results (outputs)

15. 15
Importance of early stage thinking
Infrastructure Planning, Delivering and Managing Major Projects
100%
Abilityto
Influence
Outcome
Confirm
Strategy
Confirm
Justification
Competitive
Procurement
In-Service
Confirm
Benefits
Strategic
Assessment
Contract
Award
0%
Gate 0
Gate 1
Gate 2
Gate 3
Gate 4
Gate 5
Procurement
Strategy
Investment
Decision
Readiness
For Service
Benefits
Evaluation
Business
Justification
INITIAL
Case INTERMEDIATE
Case
FINAL
Case
UNCLASSIFIED
ROUTEMAP
BIM

16. 16
Summary
Develop long term priorities &
strategy
Convert to a “short term” plan
Work to improve both delivery
and outcomes
Measure and report
Infrastructure Planning, Delivering and Managing Major Projects

17. 17 Infrastructure Planning, Delivering and Managing Major Projects
James.Ballingall@ipa.gov.uk