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Why are we letting private companies own public infrastructure?

by skort 1y ago

mensetmanusman 1y ago
Government bureaucrats are among the hardest to fire, because they rate their own excellence. Knowing this, there is probably a way to make things better…
nine_k 1y ago
It's either owned by a private company, or public (owned by municipality or similar).
supertrope 1y ago
Politicians lack the will to push for public utilities. That requires asking voters to go along with the government taking on financing, planning, operations, customer service, and being the bad guys who raise prices. It's easier to point to companies as the bad guys who raised electric rates, likely sparked a wildfire, or are taking so long to fix an outage.
- AnthonyMouse 1y ago
  The problem is this is set up as a dichotomy. Either you have privately owned infrastructure (and then a private monopoly), or make the utility company a government entity which then becomes an unaccountable bureaucracy captured by public sector unions etc. Whereas the better thing to do is have the government own the physical plant (utility poles and conduits etc.) and then hire private contractors -- large numbers of small entities, not small numbers of large entities -- to do all the actual work of operating and maintaining it. Make each contracted role simple and fungible so that none of them are too big to fail and they're all in competition with each other. You don't want a public monopoly. You don't want a private monopoly. But who says those are the only options?
  - Spooky23 1y ago
    In New York, the cheapest utilities by far are public utilities owned by municipal governments. Same in Massachusetts — I saved a fortune dropping some stuff in Holyoke. Generation is pretty low intensity from an employee standpoint. I know you’re brainwashed to hate unions, but they have little to do with it.
    - Panzer04 1y ago
      Cheapest to the consumer, maybe? What's the actual financial standing of said companies? Plenty of government-owned utilities require lots of propping to cover their losses.
      - Spooky23 1y ago
        The three I’m familiar with are cash cows. Electricity is regulated and the rates have to be supported by the business model. The small operators are mostly vertically integrated in a small area, so they can deal with the capital buildouts and aren’t subject to as many swings in commodity cost. They often even own the utility rights of way, generating additional income and avoiding property taxes. It takes alot of union workers and pensions to make up for the pay of one private CEO.
    - AnthonyMouse 1y ago
      Generation is the thing where you don't even need the government to own the infrastructure. Just don't prevent anyone who wants to from building a power plant and then have the grid buy electricity from whoever supplies it at the lowest price. It's the transmission and distribution which are the "natural monopoly" -- the government should own the utility poles -- but that's also a thing where there is a non-trivial amount of labor involved for tree trimming and storm damage etc.
  - supertrope 1y ago
    To add an anecdote my city has a publicly owned electric utility. Most of the surrounding metropolitan area is served by an investor owned utility. My city has noticeably fewer outages than nearby areas. Although that might be because this city has buried utilities and was built later but this trend of fewer outages includes the main drag that was built in the 1800s. The private utility has raised bills much faster than the public utility. Both utilities face the same underlying cost push factors of labor costs, materials, and rising wholesale prices. The private utility announced a record quadrupling of quarterly earnings to 1.2B (year over year). The public utility employs linemen. They don’t contract out operations.
pstuart 1y ago
Because our political system is rigged to allow the wealthy to make the rules.
danielmarkbruce 1y ago
Because public operation of infrastructure has often not gone well. And no matter who owns it, there is a cost of capital.
- lenkite 1y ago
  > Because public operation of infrastructure has often not gone well. Kindly define "not well" compared to privately owned infrastructure.
  - danielmarkbruce 1y ago
    https://chatgpt.com/share/68a37b87-6c30-8002-8a9a-76915e2e484b https://chatgpt.com/share/68a37b87-6c30-8002-8a9a-76915e2e48...
    - lenkite 1y ago
      OK, that didn't really do a comparison. But here are the examples that are considered better run than corporate infrastructure: Singapore MRT (Mass Rapid Transit) Fully government-owned and operated through Temasek holdings. Known worldwide for punctuality, efficiency, affordability, and cleanliness. Consistently outperforms privatized systems like the UK railways in reliability and customer satisfaction. Paris Métro & RATP (France) State-owned, with fares subsidized for accessibility. High ridership, integration with buses and trams, and affordable tickets outperform privatized systems in cost to the public. Los Angeles Department of Water and Power (USA) The largest municipal utility in the U.S. Provides electricity and water at lower rates than surrounding private utilities (like PG&E), and is often more reliable due to public accountability. Norway’s Energy Sector (Statkraft, state-owned hydropower) Provides cheap, renewable electricity. Profits flow back to the public treasury instead of shareholders. Norway has among the lowest power costs in Europe. Germany’s Municipal Waterworks Almost all publicly owned; provide safe, affordable, and reliable water with strong reinvestment in infrastructure, outperforming privatized systems in the UK (like Thames Water, plagued by leaks and debt). Singapore Changi Airport State-owned and consistently ranked as the world’s best airport. Clean, efficient, profitable, and reinvests in expansion. Private-run airports often prioritize concessions and profits over passenger experience. Dallas–Fort Worth Airport (USA) A publicly owned joint venture between Dallas and Fort Worth. It is one of the busiest and best-managed airports in the world, consistently profitable and reinvesting in facilities. ISRO (Indian Space Research Organisation) While not "utilities" per se, ISRO’s infrastructure (satellite launch facilities, tracking networks) is a prime example of state-run infrastructure outperforming expectations at extraordinary low cost. Has launched satellites at a fraction of the budget of Western private and public space agencies, and even provides launch services internationally. There are many more such examples. Public ownership tends to work best in natural monopolies (water, power grids, rail systems, airports, healthcare infrastructure), where competition doesn’t function well and the priority is universal service rather than profit.

Why are we letting private companies own public infrastructure?

by skort 1y ago

Why are we letting private companies own public infrastructure?

Government bureaucrats are among the hardest to fire, because they rate their own excellence. Knowing this, there is probably a way to make things better…

nine_k 1y ago

It's either owned by a private company, or public (owned by municipality or similar).

supertrope 1y ago

Politicians lack the will to push for public utilities. That requires asking voters to go along with the government taking on financing, planning, operations, customer service, and being the bad guys who raise prices. It's easier to point to companies as the bad guys who raised electric rates, likely sparked a wildfire, or are taking so long to fix an outage.

AnthonyMouse 1y ago
The problem is this is set up as a dichotomy. Either you have privately owned infrastructure (and then a private monopoly), or make the utility company a government entity which then becomes an unaccountable bureaucracy captured by public sector unions etc. Whereas the better thing to do is have the government own the physical plant (utility poles and conduits etc.) and then hire private contractors -- large numbers of small entities, not small numbers of large entities -- to do all the actual work of operating and maintaining it. Make each contracted role simple and fungible so that none of them are too big to fail and they're all in competition with each other. You don't want a public monopoly. You don't want a private monopoly. But who says those are the only options?
- Spooky23 1y ago
  In New York, the cheapest utilities by far are public utilities owned by municipal governments. Same in Massachusetts — I saved a fortune dropping some stuff in Holyoke. Generation is pretty low intensity from an employee standpoint. I know you’re brainwashed to hate unions, but they have little to do with it.
  - Panzer04 1y ago
    Cheapest to the consumer, maybe? What's the actual financial standing of said companies? Plenty of government-owned utilities require lots of propping to cover their losses.
    - Spooky23 1y ago
      The three I’m familiar with are cash cows. Electricity is regulated and the rates have to be supported by the business model. The small operators are mostly vertically integrated in a small area, so they can deal with the capital buildouts and aren’t subject to as many swings in commodity cost. They often even own the utility rights of way, generating additional income and avoiding property taxes. It takes alot of union workers and pensions to make up for the pay of one private CEO.
  - AnthonyMouse 1y ago
    Generation is the thing where you don't even need the government to own the infrastructure. Just don't prevent anyone who wants to from building a power plant and then have the grid buy electricity from whoever supplies it at the lowest price. It's the transmission and distribution which are the "natural monopoly" -- the government should own the utility poles -- but that's also a thing where there is a non-trivial amount of labor involved for tree trimming and storm damage etc.
- supertrope 1y ago
  To add an anecdote my city has a publicly owned electric utility. Most of the surrounding metropolitan area is served by an investor owned utility. My city has noticeably fewer outages than nearby areas. Although that might be because this city has buried utilities and was built later but this trend of fewer outages includes the main drag that was built in the 1800s. The private utility has raised bills much faster than the public utility. Both utilities face the same underlying cost push factors of labor costs, materials, and rising wholesale prices. The private utility announced a record quadrupling of quarterly earnings to 1.2B (year over year). The public utility employs linemen. They don’t contract out operations.

pstuart 1y ago

Because our political system is rigged to allow the wealthy to make the rules.

danielmarkbruce 1y ago

Because public operation of infrastructure has often not gone well. And no matter who owns it, there is a cost of capital.

lenkite 1y ago
> Because public operation of infrastructure has often not gone well. Kindly define "not well" compared to privately owned infrastructure.
- danielmarkbruce 1y ago
  https://chatgpt.com/share/68a37b87-6c30-8002-8a9a-76915e2e484b https://chatgpt.com/share/68a37b87-6c30-8002-8a9a-76915e2e48...
  - lenkite 1y ago
    OK, that didn't really do a comparison. But here are the examples that are considered better run than corporate infrastructure: Singapore MRT (Mass Rapid Transit) Fully government-owned and operated through Temasek holdings. Known worldwide for punctuality, efficiency, affordability, and cleanliness. Consistently outperforms privatized systems like the UK railways in reliability and customer satisfaction. Paris Métro & RATP (France) State-owned, with fares subsidized for accessibility. High ridership, integration with buses and trams, and affordable tickets outperform privatized systems in cost to the public. Los Angeles Department of Water and Power (USA) The largest municipal utility in the U.S. Provides electricity and water at lower rates than surrounding private utilities (like PG&E), and is often more reliable due to public accountability. Norway’s Energy Sector (Statkraft, state-owned hydropower) Provides cheap, renewable electricity. Profits flow back to the public treasury instead of shareholders. Norway has among the lowest power costs in Europe. Germany’s Municipal Waterworks Almost all publicly owned; provide safe, affordable, and reliable water with strong reinvestment in infrastructure, outperforming privatized systems in the UK (like Thames Water, plagued by leaks and debt). Singapore Changi Airport State-owned and consistently ranked as the world’s best airport. Clean, efficient, profitable, and reinvests in expansion. Private-run airports often prioritize concessions and profits over passenger experience. Dallas–Fort Worth Airport (USA) A publicly owned joint venture between Dallas and Fort Worth. It is one of the busiest and best-managed airports in the world, consistently profitable and reinvesting in facilities. ISRO (Indian Space Research Organisation) While not "utilities" per se, ISRO’s infrastructure (satellite launch facilities, tracking networks) is a prime example of state-run infrastructure outperforming expectations at extraordinary low cost. Has launched satellites at a fraction of the budget of Western private and public space agencies, and even provides launch services internationally. There are many more such examples. Public ownership tends to work best in natural monopolies (water, power grids, rail systems, airports, healthcare infrastructure), where competition doesn’t function well and the priority is universal service rather than profit.