Welcome to European Tribune. It's gone a bit quiet around here these days, but it's still going.
The problem with private rail operators is that they don't compete for the end-users. Screaming "competition" and then actually doing outsourcing is one of the biggest scams in the whole privatisation circus.

Due to the necessities of scheduling, you can almost never have more than one operator on each bit of rail anyway, so once the decision has been made (typically for a period of several years and typically on the basis of nothing whatsoever but price), there is no competition.

So outsourcing government functions to private companies is more closely analogous to the granting of royal merchant charters than to the operation of supermarkets as far as competition is concerned.

Oh, and competition isn't magic. In fact, it introduces a number of costs that are not present for state-run entities - advertising, lawyers to do tax evasion and profit, to name some obvious wastes of money.

It also introduces redundancy into the system, because to operate two companies you need two entire structures that can perform essentially the same service. Now, redundancy isn't necessarily bad, but it's not magically good either. Having 20 % more staff than you need to cover all your bases on a normal day is A Good Idea. Having two CEOs, however, is just a waste of money. (Of course, having one CEO is very often a waste of money too... but I digress.)

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Sun Oct 12th, 2008 at 03:07:06 AM EST
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