| 'Toxic' chemical found near homes A potentially harmful chemical is found near a housing development in Motherwell, North Lanarkshire. bbc.co.uk |
How pension funds can plug the investment gap Projects such as London Gateway might soon only be possible with the financial muscle of pension fundsThe London Gateway, a £1.5bn project to build a giant deep-water port and logistic park on the banks of the Thames near Thurrock, Essex, received its latest ministerial delegation last week.Vince Cable, pictured, the business secretary, followed in the footsteps of his predecessor, Lord Mandelson, and then prime minister Gordon Brown, in donning a hard hat for the obligatory tour and photo-call.The reason why London Gateway gets more than its fair share of flying visits by politicians – its proximity to Westminster aside – is the fact that there are precious few examples of other major infrastructure projects to point to in the UK.It's not that there isn't a need to build new railways, roads, ports and, most of all, new pieces of energy kit such as power stations, wind farms and electricity grids. The estimated investment required in energy alone by 2020 is a cool £200bn. It's the same story globally. According to the Organisation for Economic Co-operation and Development, an eye-watering $1,900bn (£1,200bn) a year needs to be spent on roads, rail, telecoms, electricity and water every year until 2020.So where is the money going to come from? Certainly not the banks, who need to repair their battered balance sheets after the credit crunch. Governments such as the UK's are too steeped in debt to make any meaningful contributions. Oil-rich foreign investors cannot be expected to meet the challenge on their own: the London Gateway is being bankrolled by Dubai-based DP World, which almost scrapped the project because of its debt problems and a slump in global shipping markets.Step forward, then, the pension funds. With stock markets no longer offering the steady growth they once did, and interest rates at rock bottom, pension funds' traditional investments – in shares, bonds and sovereign gilts – are no longer so attractive. Increasingly, they are putting money into new infrastructure funds, which offer long-term, steady returns – particularly if they invest in regulated assets such as electricity networks – to match the long-term liabilities of their members.Yet pension funds, like any other investor, will contribute only if they think they will get a decent return. So to justify huge up-front investment in low-carbon technologies whose economics are uncertain – such as nuclear power, offshore wind farms and clean coal – governments need to guarantee a radical regime of subsidies stretching out for decades. One chief executive of a major UK energy company claimed that getting pension funds to invest in this way could solve two of the biggest crises facing society: supporting an ageing population and climate change.Others are less optimistic. One banker compares today's infrastructure challenge with that faced by 19th-century London, when a lack of adequate sanitation turned the Thames into an open sewer, most notably during the "big stink" of 1858, leading to cholera epidemics. Only then was civil engineer Joseph Bazalgette given the funds to build an effective – and expensive – sewer network in London. This banker thinks that we will need an energy crisis of similar proportions before the political – and public – will exists to foot the bill for the billions needed to invest in infrastructure.EnergyInvestment fundsTim Webbguardian.co.uk © Guardian News & Media Limited 2010 | Use of this content is subject to our Terms & Conditions | More Feeds guardian.co.uk |
Man Utd gift Baggies point A mistake from Manchester United keeper Edwin van der Sar proves costly as his side are held to a draw by West Brom. news.bbc.co.uk |
Baby P social workers lose unfair claims case Two social workers sacked over the Baby P tragedy have lost their claim for unfair dismissal, it has emerged. telegraph.co.uk |
‘A disloyal, dishonest, criminal cheat’ – bank boss denounces rogue trader Jérôme Kerviel, the rogue trader accused of losing almost €5 billion, was denounced by a former boss as criminal, dishonest, disloyal and a cheat at his trial in Paris yesterday. timesonline.co.uk |