Infrastructure investment politics

A couple of stories caught my eye over the last few days, both relating to the ownership of infrastructure.

The first piece is from the FT and looks at the dividends paid to the owners of the UK's airports. This contrasts the amounts paid to shareholders and the debt issued. It also suggests friction between airport owners and airlines, with some moans about airport owners taking out dividends rather than investing in their infrastructure or reducing landing charges. I am unclear to what extent any of these moans are a) new or b) more of a general howl of pain from carriers.

However, I assume this piece has not come out of the blue. Someone has been complaining. And it's notable too that this piece is in the same sort of vein as the FT's coverage of Thames Water (though there seem to be more interesting questions about the financing arrangements in that case).

The second story is a GMB press release highlighting the largely foreign ownership of Anglian Water. I take my hat off to the GMB for getting some decent coverage out of something pretty straightforward - you can find the % of foreign ownership by looking on the Anglian Water website here. I think they are hitting on a vulnerable aspect of institutional investment in infrastructure in the UK - yes, there are pension funds in the mix, but they are largely overseas (thought 15% held in the UK is not insignificant).

As I've blogged before, I think this makes the politics a lot easier for advocates of public ownership of utilities. It's interesting that Anglian Water explicitly talks about who their owners are:

The vast majority of our shareholders are long-term public sector employee pension funds.

I don't know if this is actually true. CPPIB is not really a "public sector employee" pension fund, I think it covers everyone. Also the assets managed by IFM and Colonial First State (both of which are asset managers, not pension funds) could be public or private sector. The Abu Dhabi Investment Authority is a sovereign wealth fund I think. Dalmore is an asset manager, though does have public sector pension funds as clients. So it's only really GLIL that unequivocally matches the company's description.

The point I would take from from both stories is that there is a growing argument about the nature of ownership of infrastructure. These things have always been there (well ever since the assets were sold off), they are coming to attention now because the pressure around public ownership is building.