In the immediate aftermath of the UK's EU referendum a number of important infrastructure projects in the UK were put on hold or under review leaving some in the infrastructure and energy industry to question the future of these schemes. 

As the dust settles it seems likely that most of the flagship projects currently under consideration will eventually be given a greenlight. Although progress may be preceded by a period of muscle flexing as politicians newly in power assert themselves in their new roles.  

Hinkley Point C

Among the high-profile projects under review is the £24.5 billion ($31.7 billion) 3.2GW Hinkley Point C nuclear facility in Somerset, a project that will be led by France’s EDF and China’s CGN. Last month, EDF’s board of directors decided, after multiple delays, to give the project the go ahead. However, within hours of their announcement, the UK government, which many expected to agree with the plan immediately, said it would only be able to reach a decision in the Autumn.

For some time, the project has been dogged by doubts from both EDF’s executives and a number of parties within the UK. Foremost among criticisms is the £92.50 per MWh price the government has agreed to pay for power from the plant over a 35-year period. Another stumbling block is the spread of China's state power company. It has been suggested that if Hinkley Point goes ahead the construction of a new nuclear facility on a site belonging to EDF, adjacent to the decommissioned Bradwell plant in Essex, is likely to be led by the French company’s Chinese partner. This transfer of intellectual property may have been less worrying for former Chancellor George Osborne, who many believe was hoping to approve the project during the conservative leadership campaign. But when Theresa May came to power earlier than expected, a final decision on the scheme was clouded by her uncertainly over tying the knot with China’s state power company.

However, given the project’s job creation potential and the disruption cancelling the scheme would cause to the UK’s relations with France and China at a sensitive time following the EU referendum, most industry observers believe it is likely to go ahead.

Silvertown Tunnel

Meanwhile, another project that may have been delayed by a politician seeking to assert his influence shortly after coming to power is London’s £750 million ($981 million) Silvertown Tunnel PPP. The procurement process for this controversial scheme is on hold as London mayor Sadiq Khan conducts a review. Although Khan expressed concerns over the project’s environmental impacts during his election campaign, and argued the toll to be charged might be considered a tax on south east Londoners, sources believe he is likely to give his backing to the scheme. Bidding support for the project, with a number of consortia starting to form, is strong. A Chinese and a Brazilian firm are understood to have expressed interest, if they can find local partners, one source indicated.

However, Khan’s desire to put his stamp on the project may mean the procurement process will only kick off next year, another source suggested.

Airport expansion

In some cases, delays caused by political uncertainty may lead to compromises. Often cited as the most emblematic example of the impact of political delays on infrastructure projects, a decision on airport expansion for the southeast of England has faced years of delays. Former transport secretary Patrick McLoughlin’s announced that after David Cameron’s resignation a decision that was previously planned for the summer is unlikely to be made before October.

Theresa May has evasively stated that a decision will be taken “in the proper way, in due course”. Many have noted that a number of politicians currently in power, including May herself, whose constituency is located under Heathrow’s flight path, have in the past voiced opposition to plans for a third runway at Heathrow, the expansion alternative cited as most strategically desirable by last summer’s airports commission report. As a result it is possible the government may decide to approve expansions at both Heathrow and Gatwick, said one source. Expanding Gatwick is "suboptimal" because the airport does not function as an international hub to the extent that Heathrow does, which means it would undermine passengers’ motivation for connecting in London, he explained. However, increasing capacity at both facilities would enable additional flights to be divided between the two airports, minimising the environmental impact at each location, he said.

East Anglia rail franchise

The selection of a preferred bidder for the East Anglia rail franchise, where a new operator is expected to start operations in October, was previously planned for last month. Rumours had pointed to rail newcomer Rock Infrastructure and ROSCO Angel Trains as likely joint winners of the funding competition, but after the referendum vote, this seems to have been delayed. Recent problems with Southern Rail may also have influenced Theresa May’s willingness to award rail franchises, one source believes. “We continue to consider bids and will announce the new operator in due course,” a Department of Transport spokesperson said, without stating exactly when this decision will be announced.

Despite the setbacks it is likely the UK’s large infrastructure projects will go ahead. With infrastructure investors exceeding by far opportunities to invest, the sector will see continued private sector support. Concerns over Brexit may shift government rhetoric away from austerity toward Keynesian stimulus putting infrastructure spending high on the government’s list of priorities, at least once new leaders assert themselves in power and wade out of the post-referendum mire.