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  Tom - These firms need to invest in infrastructure, full stop. It is needed to deliver water services to the public. Capital is raised in a number of ways, from investors, from issuing bonds or from borrowing from banks. Some capital investment can come from profit as well though profit also needs to feed dividends to attract equity investors. There is a multiplier effect in the latter. These shares or rather the asset value they represent, is a level of security that enables the issuance of the bonds in the first place at decent rates. While the profits represents the ability to service the bonds before payment of dividends out of profits. All of this is therefore inter related.
  
  There are risks to both consumers and taxpayers if these firms get things wrong - look at the banks.
  
  These firms need to be able to access all the ways there are to raise capital. Diversification reduces risks and enables firms to operate more efficiently raising capital to suit market conditions at the time. This actually helps control costs and reduces, costs to the consumer.
  
  The public do get shares in return for their investment. Whether they invest direct or through pensions or ISA mutual funds. Here I am talking about equity, not bonds of course as bonds do not constitute equity ownership. Such bonds are available to the public via institutions as well of course.
  
  This direct issue of bonds to the public might work well and may well help but the public who invest in these are taking on extra risk with a lower reward. I believe that there may be a 'mis-buying' scandal in such bonds eventually. Nevertheless having these as part of the mix of options with added diversification is good for the consumer.

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