Infrastructure

Infrastructure dream grounded by Heathrow reality

25 Oct 2016

Britain has finally agreed to add a runway to London’s main airport. Even now, the plan may yet founder. Western democracies face challenges when launching big projects. The benefits of a renewed splurge of infrastructure spending will take decades to materialise.

Telefonica’s tower IPO deserves discount

23 Sep 2016

The Spanish telco giant is selling up to 40 pct of its infrastructure business, valued at up to 3.8 billion euros. Other telecom tower flotations have been warmly received, but the new company Telxius also includes a hard-to-value undersea cable business. That dulls its appeal.

Saudi faces choice of austerity over indulgence

7 Sep 2016

Falling oil prices may lead Riyadh to cut up to $20 bln of infrastructure projects. The risk is it might trigger a construction slump. Of course, Saudi could just increase borrowing and continue building in the desert. Restraint is perilous but would make more financial sense.

Putin is slipping into Crimean economic sinkhole

14 Jun 2016

Russia’s struggle to build a bridge link to Crimea is a microcosm of President Vladimir Putin’s problem: his annexation carries high costs but is yielding meagre benefits. Public discontent risks flaring before September’s parliamentary elections and may spur a new crackdown.

China can afford to quit infrastructure binge

13 Jun 2016

State backed enterprises stepped up fixed-asset investment by a fifth in the year to May. Much of this spending will be wasteful and will add to the country’s huge debts. Given a fairly robust labour market, China could safely take a much harder line on inefficient SOEs.