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Licensed LarcenyInfrastructure, Financial Extraction and the Global South$
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Nicholas Hildyard

Print publication date: 2016

Print ISBN-13: 9781784994266

Published to Manchester Scholarship Online: January 2017

DOI: 10.7228/manchester/9781784994266.001.0001

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PRINTED FROM MANCHESTER SCHOLARSHIP ONLINE (www.manchester.universitypressscholarship.com). (c) Copyright Manchester University Press, 2022. All Rights Reserved. An individual user may print out a PDF of a single chapter of a monograph in MSO for personal use.date: 04 July 2022

Infrastructure as financial extraction

Infrastructure as financial extraction

(p.22) Chapter 3 Infrastructure as financial extraction
Licensed Larceny

Nicholas Hildyard

Manchester University Press

Finance views infrastructure very differently from ordinary people. Yield is the determinant of what is or is not an infrastructure asset. For finance, a road, hospital or oil pipeline is not ‘infrastructure’ unless it provides a stable, contracted cash flow for the long-term. This Chapter examines how infrastructure is being reworked to provide what finance seeks of it. One focus is the contractual arrangements – Minimum Revenue Guarantees, Take or Pay contracts and stabilisation clauses – that investors are putting in place through Public-Private Partnerships to ensure guaranteed high rates of profit. Such guarantees are a crock of gold, providing legally-enforceable liens on future public flows of money that are irrevocable for the length of the contract. Even though the state remains the major financier and operator of public services, the relatively small space that has now been opened up for private investors has enabled finance to construct a multi-billion-dollar extraction machine, with major ramifications for inequality.

Keywords:   Infrastructure, Public Private Partnership (PPP), Minimum Revenue Guarantees, Take or Pay contracts, Stabilisation clauses, Contracted income streams, Financial extraction

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