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this post was submitted on 09 Oct 2023
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Privatising infrastructure is stupid AF. It was part of the 90s Zeitgeist, which haunts us to this day.
And it was known to be stupid in the 1990s already. The only people who benefit from it are the investors. Everyone else pays for their dividend.
Yeah privatization in general doesn’t work great. The only good arguments I’ve heard for private ownership is the initial investment portion.
It does work alright in some fields but it definitely does not work for natural monopolies like infrastructure (rail network, power, gas, internet/phone networks, cable, water, waste water,...) or for things people can't not choose to avoid buying (health care) or buy very infrequently (once or twice a life only).
Is Deutsche Bahn in private hands? It sounds like the same mistake that Thatcher made in the UK
Also why isnt competiton bringing the prices down?
No, it's not privatised, although currently organised as a joint-stock company (AG) with the state being the sole shareholder. But it was supposed to be privatised and made "profitable" starting in the 90s.
They didn't control it very well though. DB AG did spend a lot of money on non-rail related expenses like the DB Schenker road freight division and also on investments in other countries. Apart from that they also have some sort of weird division between maintenance and rebuilding costs, the former DB AG needs to pay and the latter are often paid for by separate funds which gives a strong incentive not to perform maintenance.
Japan seems to be one of the outliers were privatisation of their rail networks has worked out well.
It's not the privatisation per se. It is the privatisation accompanied by a lot of other circumstances bringing the worst of public and private businesses to the table. The main problem is that DB is a private company that is incentivised to let the infrastructure rot. The solution is actually pretty easy: split up the company, return infrastructure to public hand, and open up the operations to fair competition. Flixbus showed how competition absolutely decimates prices even in transport business.
This is more or less what they ended up doing in the UK after rail privatisation, taking the infrastructure back into public hands.
But you can't have anything like fair competition on train services. It's not like anyone can just plonk a train on the tracks and outcompete the other trains. They're awarded franchises, which typically have a monopoly over a particular type of service on those tracks. They can't be outcompeted, the only way they lose their franchise is if the govt is forced to step in to pick up the pieces (which has happened several times in the UK).
Flixbus showed how competition absolutely decimates prices even in transport business and Flixtrain did as well, even though it is heavily sabotaged by the entitled DB aristocrats.