Comments on: A Case For Privatising Infrastructure http://indianeconomy.org/2005/08/27/a-case-for-privatising-infrastructure/ Issues & insights Sun, 12 Oct 2008 12:02:22 +0000 http://wordpress.org/?v=2.6.1 By: Chetan http://indianeconomy.org/2005/08/27/a-case-for-privatising-infrastructure/#comment-645 Chetan Sat, 05 Nov 2005 04:55:18 +0000 http://indianeconomy.org/?p=62#comment-645 Sir, Can you tell me how or how not can privatising help improve efficiency of our naval dockyards(repai facilities),if undertaken Sir, Can you tell me how or how not can privatising help improve efficiency of our naval dockyards(repai facilities),if undertaken

]]> By: Amitabh http://indianeconomy.org/2005/08/27/a-case-for-privatising-infrastructure/#comment-194 Amitabh Fri, 02 Sep 2005 16:30:23 +0000 http://indianeconomy.org/?p=62#comment-194 I am skeptical about relying on the private sector to completely build infrastructure. This is one of those areas where several things can prevent (socially) adequate investment if we rely on the private sector - externalities : how do you privatize all the benefits from building a national highway system (reduced transaction costs of doing business, greater labor mobility etc.) - private discount rates may be very high given uncertainty of subsequent govt. action (they build a free bridge next to your toll bridge. This happened in NOIDA) - contracting problems with the multitude of govt. agencies The good news is that set of things deemed 'public infrastructure' is shrinking - technology allows multiple providers of phone services and perhaps even electricity. I am skeptical about relying on the private sector to completely build infrastructure. This is one of those areas where several things can prevent (socially) adequate investment if we rely on the private sector
- externalities : how do you privatize all the benefits from building a national highway system (reduced transaction costs of doing business, greater labor mobility etc.)
- private discount rates may be very high given uncertainty of subsequent govt. action (they build a free bridge next to your toll bridge. This happened in NOIDA)
- contracting problems with the multitude of govt. agencies

The good news is that set of things deemed ‘public infrastructure’ is shrinking - technology allows multiple providers of phone services and perhaps even electricity.

]]> By: axe http://indianeconomy.org/2005/08/27/a-case-for-privatising-infrastructure/#comment-160 axe Sun, 28 Aug 2005 02:11:53 +0000 http://indianeconomy.org/?p=62#comment-160 The attitude that waving a privatization stick improves service, and guarantees affordable utilities fails to conceed that the devil is in the details, regardless of whether the a utility is implemented publicly or through private enterprise. Specifically, all developed countries have had the foundations of public infrastructure built using public funds (and in most cases infrastructure continues to be publicly funded). Hence the claim that public spending cannot result in effective, and economical infrastructure is specious, which is not to say that private enterprise is incapable of producing social benefit by an equal measure--it's just to say that we have no long term data to backup the principle of privatizing public infrastructure. Infact to propose that privatized infrastructure <i>will</i> solve the ills of publicly run companies is to ignore notable cases such as Bechtel running the water supply in Cochabamba. The attitude that waving a privatization stick improves service, and guarantees affordable
utilities fails to conceed that the devil is in the details, regardless of whether the a utility is
implemented publicly or through private enterprise.

Specifically, all developed countries have had the foundations of public infrastructure built
using public funds (and in most cases infrastructure continues to be publicly funded). Hence
the claim that public spending cannot result in effective, and economical infrastructure is specious,
which is not to say that private enterprise is incapable of producing social benefit by an equal
measure–it’s just to say that we have no long term data to backup the principle of privatizing
public infrastructure.

Infact to propose that privatized infrastructure will solve the ills of publicly run companies is to
ignore notable cases such as Bechtel running the water supply in Cochabamba.

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