Toering catastrophe: Canary Wharf THE LARGEST property company in the bankers. At its peak the company was worth $35 billion -three times the value of Barclay's Bank for example.
It has been badly hit by the collapse of office rents in North America. But the main problem is the canary Whart office development in London's This is the largest-ever development in Europe. Its first phase, just completed, is the size of twenty Centre Points and is guessed to have cost around E1.3 billion. O&Y have Iet only around half of it, and to do so have virtually given the spate array Canary Wharf was planned during the mid-1980s boom Demand for central London office space soared following financial deregulation and rapid growth of financial capiBusiness was happy to invest in offices, apparently less risky than woustry• the developers piled in, each ignorant of the others' plans.
These offices arrived on the market tust as the boom was ending) - in 1989 the equivalent of 25 ontre oins wet ait pleted in the City alone. The result was oversupply, and since then rents have halved.
This absurd waste could be avoided if the overall amount of office building was planned by a single organisation, by nationalising this sector.
Tory policies
Ironically, Canary Wharf has been weakened by the Tories' infrastructure policies.
Reacting to the market meant that the government did not plan the necessary underground line (the Jubilee extension) until after the development got going and it will not be ready until T The Tories also relied on O&Y to pay a third of the cost of the tube extension. This money will not now be paid, and it may not go ahead, thus hitting both other businesses and residents in Docklands.
The coordination of capitalist state and private investment is always chaotic, but this takes the biscuit.
Not that the Tories have been Docklands, lohn Turkie has estimated that Canary Wharf will receive f4 billion in public subsidies, includinfrastructure.
The net public benefit has been to shift some offices two Though typical of the Tories generosity towards influential sectors of business and thein fondness for spectacle, this is a lunatic waste or money tor British capital as a whole.
wortawide are in ad serious crisis, in which the collapse of world property prices is playing a major role. O&Y is stantial effect on the whole sysWhen the banks write off its debt, they will have to cut their endi The will d epen tae by several times that DEE INEN world recession.
This wonderful banking and Properly mitem thesee th Saita refuses nationalise because 'the market should do what it is best at'.