No, the problem does not go away. You start optimising for short term political goals (see also: ongoing property debt crisis in China), and minimising short-term drama (see also: regulatory capture by unions). Sometimes you also start implementing insane projects just because your glorious leader decided to do them and cost/value is not an issue (see also: Chinese war on sparrows). Sometimes you just minimise the expense and make everyone disagreeing with you shut up, because they don't have a choice either way (see also: Chernobyl not having containment). You also get way less feedback, because you're spending someone else's money (i.e., taxpayers'). So no, "government consists of decent people and they won't optimise for the short term even though they are doing it now because there'll be no commercial company controlling it" is a very optimistic take at most and definitely not a realistic one.