7 ms·

You can't privatize competently maintained infrastructure.

by jacobsenscott 4y ago

_dain_ 4y ago
most japanese railways are privately owned and operated and maintained, and turn a healthy profit
- gamblor956 4y ago
  Which is why they shut down vast miles of their networks in unprofitable rural areas... And that is why rail is so expensive in the States; transit decisions are not made on the basis of profitability. (Note that in the case of Japan, some of these private rails were converted to "Third Sector" aka public-private rails, where they continue to be run by the private rail company under the financial subsidy of the local prefectures through which the rail line runs.)
  - johncessna 4y ago
    > (Note that in the case of Japan, some of these private rails were converted to "Third Sector" aka public-private rails, where they continue to be run by the private rail company under the financial subsidy of the local prefectures through which the rail line runs.) I'm sure there are some differences, but this is true for Amtrak in the US too https://en.wikipedia.org/wiki/Amtrak# https://en.wikipedia.org/wiki/Amtrak#
  - pigsty 4y ago
    But there are still countless lines in use where you’ll see one person get off every 3 stops. It’s sometimes insane how lines are kept running in Japan.
    - gamblor956 4y ago
      Right, those are "Third Sector" lines, where the stops or even the line itself are subsidized by the local prefecture.
  - _dain_ 4y ago
    > Which is why they shut down vast miles of their networks in unprofitable rural areas... The Japanese countryside is ageing and depopulating. Any railway operator, public or private, has to face this reality. You can either shut them down, or reduce service, or subsidize them; all three are painful in their own ways, and all three are done in different places, depending on local conditions. Furthermore, a line may be "unprofitable" on paper, but still be worthwhile overall because of network effects. The rural decline is at least being managed with more rationality than the senseless Beeching cuts[1] (and at that time, British Rail was wholly under state control). [1] https://en.wikipedia.org/wiki/Beeching_cuts https://en.wikipedia.org/wiki/Beeching_cuts
- Analemma_ 4y ago
  This is a lot more complicated than your pithy quote is making it sound. Japan has a mix of public, private, and quasi-private railways, and while many of them are profitable on a cash-flow basis, that's only because the government assumed (and passed to taxpayers) the majority of the debt of the former public railway entity (which was mainly from costs of construction) as part of the privatization program in the 80s and 90s. This amounted to something like 30 billion dollars that the companies didn't have to pay.
  - norgie 4y ago
    +1 - add in that they also get a lot of money from developing land adjacent to their rail lines, and operating things department stores, apartments, bus lines, etc. They don't get all their money from providing rail services.
    - csdreamer7 4y ago
      I barely remember that, but that is how the old dos game A-train was based off of.
    - _dain_ 4y ago
      Yeah, although IIRC some/many Japanese railways are still profitable even discounting the land development interests. Twitter trainman @380kmh has written about this but I can't find the thread right now. It's just the private version of transit-oriented development[1]. It's a good way to align incentives. The railway increases the value of the land around the stations, so the railway company gets to enjoy some of that benefit. Having the most salient product/service as a loss-leader for the real money-maker behind the scenes is a very common business strategy. Hell, it's how American railroads got built in the old West. It's how London became Greater London. Many governments seem to have forgotten this basic stuff ... they'll do silly things like keep restrictive low-density anti-retail zoning codes in the areas around train stations. And then they wonder why the promised benefits of the railway didn't arrive and people still drive everywhere. Or they won't see any benefit to pre-emptively expanding the network into new places because "nobody lives there", reversing cause and effect. [1] https://en.wikipedia.org/wiki/Transit-oriented_development https://en.wikipedia.org/wiki/Transit-oriented_development
- lmm 4y ago
  Notionally private, but often the government is the biggest shareholder. And the tax and planning regime channels a lot of funding towards them. (Though the way I see it the problem is more the opposite: the US tax and zoning regime diverts a lot of public money to subsidise car travel, implicitly and explicitly, which means it undercuts fairly-priced rail transport).
  - throwaway2037 4y ago
    Exactly this. Tokyo Metro: 100% owned by the Government of Japan and the Tokyo Metropolitan Government. Toei Subway: 100% owned by the Tokyo Metropolitan Government. JR East: The vast majority of their infra was built before privitisation using cheap or free gov't money. Also, during their 100+ year build-out, the Japanese gov't would regularly favour their own national system over private systems (grants, loans, approvals, etc.). This gives them a huge economic advantage that lasts today.
    - fomine3 4y ago
      Let's see Tokyu, Tobu, Odakyu, Hankyu, and so on. (though such private trains only profitable on metropolis.)
      - lmm 4y ago
        Keiratsu aren't truly private industry; they tend to have at the very least close political connections.
  - _dain_ 4y ago
    >Notionally private, but often the government is the biggest shareholder. Better than British railways (and energy suppliers). Private companies with a government as the biggest shareholder. Just not the British government ...

You can't privatize competently maintained infrastructure.

_dain_ 4y ago

most japanese railways are privately owned and operated and maintained, and turn a healthy profit

gamblor956 4y ago
Which is why they shut down vast miles of their networks in unprofitable rural areas... And that is why rail is so expensive in the States; transit decisions are not made on the basis of profitability. (Note that in the case of Japan, some of these private rails were converted to "Third Sector" aka public-private rails, where they continue to be run by the private rail company under the financial subsidy of the local prefectures through which the rail line runs.)
- johncessna 4y ago
  > (Note that in the case of Japan, some of these private rails were converted to "Third Sector" aka public-private rails, where they continue to be run by the private rail company under the financial subsidy of the local prefectures through which the rail line runs.) I'm sure there are some differences, but this is true for Amtrak in the US too https://en.wikipedia.org/wiki/Amtrak# https://en.wikipedia.org/wiki/Amtrak#
- pigsty 4y ago
  But there are still countless lines in use where you’ll see one person get off every 3 stops. It’s sometimes insane how lines are kept running in Japan.
  - gamblor956 4y ago
    Right, those are "Third Sector" lines, where the stops or even the line itself are subsidized by the local prefecture.
- _dain_ 4y ago
  > Which is why they shut down vast miles of their networks in unprofitable rural areas... The Japanese countryside is ageing and depopulating. Any railway operator, public or private, has to face this reality. You can either shut them down, or reduce service, or subsidize them; all three are painful in their own ways, and all three are done in different places, depending on local conditions. Furthermore, a line may be "unprofitable" on paper, but still be worthwhile overall because of network effects. The rural decline is at least being managed with more rationality than the senseless Beeching cuts[1] (and at that time, British Rail was wholly under state control). [1] https://en.wikipedia.org/wiki/Beeching_cuts https://en.wikipedia.org/wiki/Beeching_cuts
Analemma_ 4y ago
This is a lot more complicated than your pithy quote is making it sound. Japan has a mix of public, private, and quasi-private railways, and while many of them are profitable on a cash-flow basis, that's only because the government assumed (and passed to taxpayers) the majority of the debt of the former public railway entity (which was mainly from costs of construction) as part of the privatization program in the 80s and 90s. This amounted to something like 30 billion dollars that the companies didn't have to pay.
- norgie 4y ago
  +1 - add in that they also get a lot of money from developing land adjacent to their rail lines, and operating things department stores, apartments, bus lines, etc. They don't get all their money from providing rail services.
  - csdreamer7 4y ago
    I barely remember that, but that is how the old dos game A-train was based off of.
  - _dain_ 4y ago
    Yeah, although IIRC some/many Japanese railways are still profitable even discounting the land development interests. Twitter trainman @380kmh has written about this but I can't find the thread right now. It's just the private version of transit-oriented development[1]. It's a good way to align incentives. The railway increases the value of the land around the stations, so the railway company gets to enjoy some of that benefit. Having the most salient product/service as a loss-leader for the real money-maker behind the scenes is a very common business strategy. Hell, it's how American railroads got built in the old West. It's how London became Greater London. Many governments seem to have forgotten this basic stuff ... they'll do silly things like keep restrictive low-density anti-retail zoning codes in the areas around train stations. And then they wonder why the promised benefits of the railway didn't arrive and people still drive everywhere. Or they won't see any benefit to pre-emptively expanding the network into new places because "nobody lives there", reversing cause and effect. [1] https://en.wikipedia.org/wiki/Transit-oriented_development https://en.wikipedia.org/wiki/Transit-oriented_development
lmm 4y ago
Notionally private, but often the government is the biggest shareholder. And the tax and planning regime channels a lot of funding towards them. (Though the way I see it the problem is more the opposite: the US tax and zoning regime diverts a lot of public money to subsidise car travel, implicitly and explicitly, which means it undercuts fairly-priced rail transport).
- throwaway2037 4y ago
  Exactly this. Tokyo Metro: 100% owned by the Government of Japan and the Tokyo Metropolitan Government. Toei Subway: 100% owned by the Tokyo Metropolitan Government. JR East: The vast majority of their infra was built before privitisation using cheap or free gov't money. Also, during their 100+ year build-out, the Japanese gov't would regularly favour their own national system over private systems (grants, loans, approvals, etc.). This gives them a huge economic advantage that lasts today.
  - fomine3 4y ago
    Let's see Tokyu, Tobu, Odakyu, Hankyu, and so on. (though such private trains only profitable on metropolis.)
    - lmm 4y ago
      Keiratsu aren't truly private industry; they tend to have at the very least close political connections.
- _dain_ 4y ago
  >Notionally private, but often the government is the biggest shareholder. Better than British railways (and energy suppliers). Private companies with a government as the biggest shareholder. Just not the British government ...