“Infrastructure is part of the political process […] and politicians are usually opportunistic animals”.
That's how Joschka Fischer, former Vice Chancellor and Foreign Minister of the Federal Republic of Germany, addressed what is probably the number one concern on the minds of many of the 500 attendees at Infrastructure Investor's 2013 Berlin Summit.
He continued: “Politicians usually sign agreements when they are not under pressure and then when they are under pressure, all of a sudden, authorities start looking at these agreements, the media jump on board…”
According to the former German Vice Chancellor, the best way for investors to protect themselves against changing political moods is to first acknowledge that infrastructure is part of the political process and engage not only with state authorities, but also with opposition parties and the public.
Secondly, Fischer counselled investors to be as transparent as possible, and to take pains to counter any perception that there is a lack of transparency around their investments.
And finally, the German politician argued that long-term infrastructure investors need to invest sustainably, even if that makes their investments more expensive. A question from the floor highlighting that investors typically see sustainability as the enemy of returns allowed Fischer to neatly summarise his position:
“[Conventional wisdom says] the cheaper you build, the better your returns are. But you cannot think like that if you are a long-term infrastructure investor. If you do, you will only create problems for yourself down the line.”