The misnomer is that the private sector will always be more efficient and will do things better.
This is only true for things like garbage collection where at the end of the contract the next contract goes to the lowest bidder. There is no (or very little) in the ground infrastructure to lock us into the current company. There is no skilled labour that can't be replaced. In these cases the private sector must operate lean if they want to win the next contract (assuming a true open market with no corruption or kickbacks
). In short true private sector competition--this will almost always be better than government run. There was also no true asset to sell! Could be other things like snow ploughing, road construction...
The catch, Hydro is not garbage collection.
The problem with sort-of "monopolies" like Hydro (or the 407) is that there is no competition, they have in the ground infrastructure that cannot just be replaced or easily over built by a competitor and in the case of Hydro require skilled labour. Now you have an entity that has no incentive to be more efficient (no competition, can't have competition) AND they must also raise more money than before to pay the shareholders. You almost always pay more in the long run.
With the sale of Hydro the government gets a short windfall and the net future value is crap (cost to the people).
This is only true for things like garbage collection where at the end of the contract the next contract goes to the lowest bidder. There is no (or very little) in the ground infrastructure to lock us into the current company. There is no skilled labour that can't be replaced. In these cases the private sector must operate lean if they want to win the next contract (assuming a true open market with no corruption or kickbacks
). In short true private sector competition--this will almost always be better than government run. There was also no true asset to sell! Could be other things like snow ploughing, road construction...The catch, Hydro is not garbage collection.
The problem with sort-of "monopolies" like Hydro (or the 407) is that there is no competition, they have in the ground infrastructure that cannot just be replaced or easily over built by a competitor and in the case of Hydro require skilled labour. Now you have an entity that has no incentive to be more efficient (no competition, can't have competition) AND they must also raise more money than before to pay the shareholders. You almost always pay more in the long run.
With the sale of Hydro the government gets a short windfall and the net future value is crap (cost to the people).
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