"Neil Arlidge" <[EMAIL PROTECTED]> wrote: >Nick Atty wrote: >> On Tue, 20 Nov 2007 10:24:04 -0000, Neil Arlidge wrote: >> >>> There is one school of thought that says we should just let BW get >>> on with it. The waterways will survive in some form or other. With a >>> slight downturn in the economy BW will hang themselves...after all >>> that is what happens when you mess with virtual privatisation, >>> market forces and 200 year old infrastructure...look what happened >>> to Railtrack...and Metronet.
This comparison doesn't work. BW depends primarily on *income* from its property portfolio. Such income mostly comes as rent from standard leases, which are usually for 20 or 25 year terms with upward-only rent reviews (i.e. the rent never goes down). In other words, this is an unusually secure and stable form of income, exactly the type needed for funding the waterways. The design of the original railway privatisation was poor, because it suffered from the unfortunate constraint that it should produce an arrangement that any incoming Labour government would find too expensive to reverse (the design chosen overlooked the fact that if the railways went bust, renationalising them would not be expensive). It also ignored the original logic under which the railways were build, i.e. that the same business should own the track and the trains, and run the trains. The Metronet problem is based on the looney-tunes way in which the Tube is structured (not the least the huge subsidies it needlessly depends on). A significant cause of it is also the grotesquely complicated contracts involved, a typical artifact of the generally-failing PFI idea. If funding yourself from the income of a property portfolio is such a bad idea, how is it that so many major univerties (Harvard, Stamford, Oxford ...) have used it successfully for so long? >> I am arguing against: >> >> Endless rows of identikit fake-wharehouse-shaped housing on both banks >> of miles of waterways in the suburbs. >> Endless shiny office buildings in the centres >> Both of which take a lot of value from being by the waterways, and >> from having boats passing, but return nothing other than the >> occasional "No Mooring" sign or the closure of a useful facility >> because it doesn't fit in. Then talk to the local authorities that approve this stuff. This is not an issue of waterways management. However, it may be a bit unrealistic to expect the continuation of waterways lined with derelict brick sheds. >> New boat after new boat crewed by people who have no interest in the >> waterways per se, Yes - keep those heretics out of our church! Sic the dogs on them! >I have often wondered why BW want a larger property portfolio and the >provision to borrow and seen to make no real attempt to get in money from >community sources, Wonder no more. It is is because BW wants a secure income to cover as much of its revenue requirements as possible. Government grant is not such an inome. "Community sources" money is even less so. >could it be that they have not *quite* got a large enough >portfolio (and they KNOW this?) to weather any down turn in the property >market. You are partly right. BW does *not* have a large enough portfolio. It still needs government grant to cover the difference between its property income and its operational costs. But that is nothing to do with the normal cycles of the real estate market. > Shirley a lot of their forcasts for their income from property was >based on the past few good years and even if their income levels out, or >takes even a tiny down turn, they will be in complete $hit? No. See near the top of this posting. Adrian Adrian Stott 07956-299966
