Private sector adoption of more trusted governance does not mean diminished returns, but longer term, less volatile returns to investors. Investors in infrastructure can still get enhanced returns through capital gains, but by selling a performing company managed for long term sustainability not to maximise short-term value.
The mistrust of private sector models comes from a system that focuses on measures to maximise short term shareholder value. But such short-termism is likely to be self-defeating in the long term if it results in greater regulation and contractual control or if private ownership models fall out of favour.
Building trust into governance is actually economically rational.
The pain for shareholders is to forego some short-term opportunities such as refinancing or asset stripping that could be realised (at the expense of other stakeholders), but the gain is the enhanced and stable returns that a company that is trusted by stakeholders can realise. It will appeal to a different set of investors with a far longer investment horizon, who invest in a company to derive sustained, involatile returns from assets over their life.
This model is absolutely not recommended for all infrastructure investment. In many infrastructure sectors, the private sector takes substantial risk and when it delivers projects successfully it should expect to maximise its returns in the traditional way. Very successful infrastructure funds have created huge value to society in so doing.
But where the infrastructure is being commissioned by government and paid for by the taxpayer or in the case of utilities where a natural monopoly/oligopoly exists, then a radical change in governance is needed to restore trust. This should not necessarily imply lower returns, just different returns for different investors over a longer period.