Thursday, February 23, 2017

UK Govt Strips Off Yet Another Asset - The Green Investment Bank

The Green Investment Bank Plc is the first bank of its type in the world created by the UK Government in 2012 and solely capitalised with taxpayers money. The Bank backs green projects on commercial terms and mobilise other private sector capital into supporting such projects.

Since its establishment, it has helped financed over £11bn of UK green infrastructure projects investing £2.7bn of public money as part of that. These includes offshore wind farms and onshore renewables in waste and bio-energy, amongst other. It boast of providing enough energy to power 5million homes across UK. 

As a public-owned company, it is also profitable making almost £10m in profits last year alone and projecting a return on investment of 10% based on its current portfolio if completed. It has also branched out into the international scene where it stands the best chance being the first of its kind. 

For a public-owned institution, there is a lot of benefits and even more potential for this unique organisation. Among that is the potential to ensure that green energy is pursued and developed for the benefit of the all. And backed by public money, it means people would be put before profits in achieving that. But guess what, when the tree hasnt yet even started bearing its much anticipated fruits, the UK govt has decided to uproot it and give it away to a private investor, Macquarie, an [Australia founded] investment bank.

But in light of the current focus of the UK govt to exit the EU and take back control, it is hypocricy for it to want to sell this public investment to a private investor whose focus is on profits thus putting people and the climate secondary. You cant be taking back control on one hand and giving it away on the other. 

But that is not the only and shocking aspect of this short-changing of the taxpayer in this instance. It is also the fact that the GIB is only 5 years old, not loss-making and still has a lot of potential both in the UK where renewables still accounts for around 20%, and on the international scene where for instance in Africa and most of Asia, renewables are still far, far behind. So this company stands to make huge and hopefully, ethical profits for the UK taxpayer and could help alleviate its strained public purse. That in turn would support public services like education, health and social care, old and new infrastructures, amongst others. Selling off this asset when it has not reached its prime is therefore highly irresponsible and short-sighted.

Although UK govt wants to retain a 'special share' in the company, a freedom of information response shows that it wouldnt have any impact on the private ownership pursuing fossil fuels which will be a deviation from its green purpose. This, because the only way for the special shareholder - the UK govt in this instance - to try to prevent any restricted activities would be to bring a derivative claim against the [new] directors of GIB; and this is unlikely but also tedious and another waste of public funds.

Why then did the govt invest taxpayers' money in something it has no interest in maintaining even a generation? The argument that public-owned basic utilities are best run in private hands is utter myth. The private sector has a role to play in the economy but should not be given sole control of basic amenities that guarantees and ensures social justice, access and equal opportunity to use; this should be the role of govt as a service to its public. Keeping these utilities in public ownership would avoid the govt becoming dictatorial, intrusive and controlling, through actiions like price control, which becomes necessary in the event of manipulation, over-pricing or even monopoly, or such other activities, and guarantees general access and distribution. 

Countries like France has demonstrated this by solely owning companies like EDF. This probably contributes to the reason residence of France pay over 20% less in energy than UK residents who pay the highest electricity bill in Europe. This an addition to govt's high taxation and levies.

The same applies in rail fare. The UK barely owns any of the main (or none at all) rail transport providers in the country. This has resulted in ridiculous rail fare for UK residents. Yet in Germany, the largest rail company - the Deutsche Bahn - is in sole public ownership. In Netherlands, the Nederlandse Spoorwegen, the principal passenger railway operator is State-owned and the benefit are that rail fares in the Netherlands is jealously low and services, of high standard compared to the UK.

Why can't UK Plc invest and maintain these basic utilities for the benefit of its citizens and residents instead of conglomerates? Why does our govt believe the mantra that basic utilities are better off in private hands? Yet every evidence points to the alternative in this aspect. This mythical belief in privatisation and marketisation of basic amenities is now slowly but surely eating into health and social care with the early consequences proving to be nothing but catastrophic.

The Green Investment Bank does not need to be sold off. But hey, all protests and exposing of this would surely be like water on a rock. The guys in govt have their donors, business partners, friends and acquaintances to please through handing them ownership of things we cannot do without and thus infinite profits. 

But shout we must continue: stop selling off our public assets and investment!!!

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