Is a privatized railway viable ?

[Masquerouge]

Okay so I've guess you've heard about the huge train accident that happened in Japan a few days ago.
What amazed me is that I thought Japan's railway system was doing pretty well ; Japan train drivers are highly respected, they have a high-speed train that is almost as good as France's and Japan is not particularly renowned for these kind of blunder.
And there, I read this
http://www.nypost.com/news/worldnews/45407.htm
and specifically this :
"The rail company, which was privatized a year ago, has been experiencing sluggish revenue growth and has been trying to improve profitability by cutting costs."

Doesn't it smell exactly like what happened to the British railway system ? Because private companies are focused on making money and not on providing a safe and secure service, newly privatized railway companies, unable to cope with the huge maintenance costs, experience a decrease in quality so severe that human lives have to pay for it ?

My opinion is that some businesses are simply not suited for the private sector, because they have structure costs that are waaayyyy to high, and you can't afford to cut them down. Railway is one of them. Rail maintenance is one of the most expensive thing on earth. And a trian driver, especially a commuter train driver, has such a huge amount of responsibility that you cannot simply cut down on formation and training.

That's why I think the rail industry should not be privatized, as several tragic accidnts have shown us, and I'm quite happy that back in France my taxes were paying for a safe, reliable, modern railway system, that looses money.

Your thoughts ?

 

[luiz]

Sure it can, if properly done.
I'm not familiar with the Japanese system, but the british privatization was very poorly done, as it was not actually a full privatization.

BTW, in Brazil the only railroads that work properly are the privately-owned ones. A private company, Vale do Rio Doce, is alone building more railroads then the brazilian government. So clearly the operative prices are not beyond the capacity of the private sector.

 

[Masquerouge]

Sure it can, if properly done.
I'm not familiar with the Japanese system, but the british privatization was very poorly done, as it was not actually a full privatization.

BTW, in Brazil the only railroads that work properly are the privately-owned ones. A private company, Vale do Rio Doce, is alone building more railroads then the brazilian government. So clearly the operative prices are not beyond the capacity of the private sector.

Does Brazil have an history on an efficient (not economically, but, err, 'servically" ) public railway system ?
Because that might be a reason, you know. I think a private company is more likely to succeed if they have to build everything from scratch, because then shareholders don't expect they''ll turn a profit soon, so they have time to build up infrastructures. Exactly like the cell phone boom.
And is your company turning a profit ? Is it on the stock market ?
I'm really interested

 

[nonconformist]

A Britisher says:

PRIVATISATION OF RAILWAYS SUCKS.

 

[E-Raser]

One main prob about private RR is that this companies stick to economic routes. This means that tiny villages on not so profitable routes will stay without or with unsufficiant supply.

So I'd agree to a 'Britisher' (what happens rarely )

PRIVATISATION OF RAILWAYS SUCKS.

 

[Masquerouge]

One main prob about private RR is that this companies stick to economic routes. This means that tiny villages on not so profitable routes will stay without or with unsufficiant supply.

Exactly. I guess it all boils down to what you expect from a train company : to be profitable, or to provide service ?

 

[luiz]

Does Brazil have an history on an efficient (not economically, but, err, 'servically" ) public railway system ?
Because that might be a reason, you know. I think a private company is more likely to succeed if they have to build everything from scratch, because then shareholders don't expect they''ll turn a profit soon, so they have time to build up infrastructures. Exactly like the cell phone boom.
And is your company turning a profit ? Is it on the stock market ?
I'm really interested

We never had a decent railway system, what makes it even more difficult and expensive, as it has to built from scratch.
And Vale is an insanely profitable corporation, they are literally swimming in money.

It is on the stock market. I have 1,000 dollars in their stocks

Edit: And I expect a train company to be profitable, not to cover the whole nation. Covering my whole nation, for exemple, would be simply impossible.

If a village is to tiny to have a profitable train line, then the villagers should take the bus.

 

[nonconformist]

One main prob about private RR is that this companies stick to economic routes. This means that tiny villages on not so profitable routes will stay without or with unsufficiant supply.

So I'd agree to a 'Britisher' (what happens rarely )

PRIVATISATION OF RAILWAYS SUCKS.

Eh, you're jsut agreeing with the French in me.

 

[Mise]

Sure it can, if properly done.
I'm not familiar with the Japanese system, but the british privatization was very poorly done, as it was not actually a full privatization.

BTW, in Brazil the only railroads that work properly are the privately-owned ones. A private company, Vale do Rio Doce, is alone building more railroads then the brazilian government. So clearly the operative prices are not beyond the capacity of the private sector.

How much competition is there in Brazil? Where does it originate form? What gov't regulations are in place to prevent monopolies forming? What regulations exist to encourage competition?

EDIT:

If a village is to tiny to have a profitable train line, then the villagers should take the bus.

I agree.

 

[E-Raser]

Eh, you're jsut agreeing with the French in me.

Ehhehe, yeah well, now I feel better Thanks.

 

[IglooDame]

Exactly. I guess it all boils down to what you expect from a train company : to be profitable, or to provide service ?

My admittedly basic understanding of capitalism is that the former tends to require the latter.

 

[luiz]

How much competition is there in Brazil? Where does it originate form? What gov't regulations are in place to prevent monopolies forming? What regulations exist to encourage competition?

Small competition in railroads, most of them are government-owned, though that is changing.
The anti-monopoly legislation would only come into play if a certain corporation had X% of the market(I don't know how much X is). In which case they would force said corporation to sell Y% of their activities in the sector.

EDIT: I agree.

 

[newfangle]

Traditionally privitization of railways has resulted in government intervention anyways (which makes this worse, obviously).

In early America raily companies would get chunks of land to operate on from the government, giving them a monopoly in a particular region. Obviously something like this results in rapid degredation of rail service.

The alternative is that each rail company constructs their own line. This seems rather inefficient and a waste of space.

An alternative which I'm not sure has been done before is if the rails were owned by a third party and were leased to the train company.

 

[E-Raser]

My admittedly basic understanding of capitalism is that the former tends to require the latter.

If there isn't a monopoly, than you're most propably right. If there's one though things may look different.

Basic supply like energy, public transport, medical insurance, pensions fonds, agriculture, military factories and so on shouldn't be 'sold out'. They are to much vital for the population to either allow foreign companies to deal with them above a certain ammount, or to put them on the free market without control.
A nation must be alert to keep control about the most vital supplies!

 

[luiz]

Agriculture???!!!

You are against private agriculture???!!???

No offense, but how very stalinist of you.

 

[E-Raser]

Agriculture???!!!

You are against private agriculture???!!???

No offense, but how very stalinist of you.

I am not against private agriculture. I just vote for the state to make sure that supply with nutients it granted at any circumstances for everyone for a fair price. This should be ruled out by the Gov.. Inside this frame free agriculture may well exsist.

 

[newfangle]

Wishful thinking. State-dominated industries are not "free." Don't delude yourself. If you want to use government coersive power to meet your political ends, whatever, but don't go around thinking that it is "free."

 

[E-Raser]

*fg* Inside a frame makes clear it is not completly free- never meant this way.
As free are you- allowed to move freely as long you do not touch the frame give to you by the laws of the society you live in.
If 'not free' applies to my model of agriculture you must admit to be imprisoned yourself.
Clear?

 

[newfangle]

Free to move inside a prison doesn't imply freedom.

 

[Suppersalmon]

A Britisher says:

PRIVATISATION OF RAILWAYS SUCKS.

I totally agree the trains in britain are rubbsh