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Comment by oh_sigh | Hacker News Reader

This would be in Canada, so we should see how Canada handles PPPs:

https://en.wikipedia.org/wiki/Public-private_partnerships_in...

Amazing that the 407 is used as an example. The government spent, inflation adjusted, over $100B to acquire the land and then build the highway. The cost was for the public.

Then they leased it to a private consortium for 99 years for $3B, claiming that it was a win because it "cost" $1.5B to build. That consortium has since made a windfall charging ludicrous toll fees -- the public pays again -- privatizing the profits.

PPP is overwhelmingly a sign of a bad deal. Where politicians trying to get a short term "win" end up costing ratepayers multiples.

Just because it's not entirely clear to me, are all of your numbers inflation adjusted? Or just the cost to buy the land? Because it doesn't pass the sniff test that the government would lease the project for a century for 3% of its present value.

The government of the day wanted the political "win" of claiming a balanced budget. That it would cost the residents many, many multiples over the years wasn't considered important.

I should add another important point about the 407 -- the route was chosen to be a traffic release, and an industrial corridor. Because of the very high toll roads it has become essentially an "executive" highway ($41+ one way trips), and the trucks and other traffic it was supposed to offload clog up the existing highways. The public benefit has been completely destroyed because the highway has been re-purposed for private benefit.

It is a debacle from top to bottom. But for one brief moment a government could claim a balanced budget (though they were actually $10B in the red).

PPP: Privitize the profit and socialize the cost. Sidewalk labs can take a long walk off my short Queen's Quay pier.

Yes. Let corporations in to cannibalize and strip-mine the public commons (common-wealth) with perverse incentives and gamify things too important the government should be doing.

Btw, do you ever watch TRNN or Economic Update?

Add in another horrible example of privatization in Canada, Ontario's Hydro One power company.

With every attempt of privatization of public services, I point out that:

* Public services are sometimes just that - they won't be profitable

* Privatization not only incentivizes skimping on services and deferring infra investment to save costs, but you now have the insult of a profit margin built into prices on often vital services. The "private sector efficiency" privatizations are sold on almost never end up aligning with the public interest

* Undoing privatization almost always costs more than was made privatizing.

Some other bad example:

Chicago selling decades of parking meter collection for pennies on the dollar

German Railways going private and the continual gutting of rural services that came along with it

Enron's market manipulation of California electric grid, causing blackouts and skyrocketing prices while they profited

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