Public Services International Research Unit
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Activity 6.2: Financing investments



FOCUS

To develop an understanding of capital investments and their costs

To appreciate how public sector companies can access the same sources of finance as multinationals

To enable trade unionists develop alternative plans

TASKS:

Split into two groups, running a regional water or electricity company - one public sector, one private sector. You have 200,000 customers, who pay an average bill of $500 per year, giving you a total income of $100m per year. You have to plan the financing of a new sewerage works or the modernisation of an electricity distribution network, costing between $100m and $200m. It has to be paid for over the next 10 years. Each group should set out a business plan showing:

  • How much do you want spent on the new system?
  • Where will you get the money for this investment: shareholders? bonds? bank loans? International bodies?
  • How much interest/dividends/capital will you have to pay each year?
  • By how much will you increase prices?

RESOURCES:

TIME

2 hours