More than 20 years ago, the British Parliament embarked on an era of private public partnerships (P3s) that would revolutionize British society. Perhaps, they never envisaged a time when all seven of Britain’s major airports under the British Airports Authority (BAA), including, Heathrow, one of the biggest and busiest airports in the world, would be sold to a conglomerate of foreign investors.
That conglomerate is headed by a Spanish construction company representing amongst others a Quebec pension fund, a reserve fund from Singapore, and an Australian bank.
Surprisingly, despite dwindling British involvement in the administration of the United Kingdom’s airports, few questions have been raised about such deals. Where once there might have been a firestorm of protest over the sale of such a key British institution, there was apparently barely a whisper of concern, according to an editorial in The Guardian newspaper.
“When the British Airports Authority, as it was known, was being prepared for privatization in 1986, the transport secretary, Nicolas Ridley, declared “competition will be open and above all fair.” So it has proved, but not in the way Mr. Ridley could have imagined. A little over 20 years ago the prospect of BAA being bought by a Spanish building company was unimaginable – and not only because the British government held a golden share that allowed it to block any takeover. Spain had only just joined the European Union (EU), and the single market was still several years away.”
The Guardian says Spanish investment in the UK has been going on for some time. British Telephone Cellnet is now owned by Spain’s Telefonica. That Spanish construction company leading the buyout of British airports, Ferrovial, already operates the Jubilee and Picadilly Underground lines in London, and has a stake in airports in Bristol and Belfast, Northern Ireland. That’s not the problem according to The Guardian editorial.
The problem, according to the newspaper, is that while Britain is selling off some of its key public institutions to foreign buyers, it’s getting little in return. Many of the partners in the EU do not seem too anxious to sell off their publicly run institutions. “Elsewhere in Europe,” concludes The Guardian, “there has been a worrying trend of governments obstructing cross-border sales, especially in sensitive sectors such as energy. Britain may or may not be better off as a result of its selling to all comers, but the European commission should act more rapidly to prise open EU members’ markets. Otherwise the burden of being a good European may fall too heavily on Britain.”