The basics are ignored at your own peril

Tony Jackson gets the point when in his “Fingers could get burned as hot money floods infrastructure” (October 17) he quotes a banker saying “what matters is not what the contract says, but whether in the long run the electorate will tolerate it.” South America is littered by privatizations gone wrong because of much advanced financial engineering that somehow forgot to take the basics into account.

A couple of years ago when the hundred-year-old private electric utility company that served my hometown (a South American city) was taken over by an international player, it became within a short time leveraged up to its hilt in debt, and I suspect also poison pills and golden parachutes, and I just knew we were heading into the wrong direction. When I now read about all the consolidations in Europe, which can only distance consumers from their day-to-day local electrical engineers and place their needs in some distant trading rooms, I feel the same. It is clear that sooner or later all those high valuations paid by financial wizards purchasing utilities and that are expected to be repaid by the European electricity consumers, will shatter everyone’s blissful ignorance.

Tony Jackson infrastructure