Many economists warn of a classic mismatch of incentives. Governments may have good reason to invest in projects that yield no profit, building roads to nowhere that ultimately open up undeveloped land for job-generating commerce. Government alone has the incentive to upgrade shoddy wastewater treatment and supply systems for drinking water. Absent public guarantees for profits, private companies have no inducement to bring such works into creation.
“Private investors need to have a decent rate of return,” said Louis Kuijs, head of Asia for Oxford Economics, based in Hong Kong. “They cannot wait 40 years, and they are simply not able to take into account the additional tax revenues for the government.”
Complete twattery in fact.
Did water investment go up or down upon privatisation? Up.
Further, we do not control prices to guarantee a profit, we control them to stop a natural monopoly ripping the consumer off. And what the fuck is this guy at Oxford Economics on about? He’s living in a place where the metro system funds itself from the rise in land values around a new station.