Wednesday, July 19, 2006

Privatisation sand-box



Simon Jenkins writes a piece supporting the Tories re-think on rail nationalisation. The piece itself is unremarkable, but it's the comments, as always at the Guardian, that raise the eyebrows. Almost without exception the line that some services can only be provided by the state is towed. Water, electricity, telephone lines (god help us) sewage, health all must be controlled by the Government.

As might be expected, I disagree quite strongly with all of this. The introduction of provate sector mentalities, reward systems and incentives has transformed every sector it has touched. The transformation of (for example) British Airways is instructive. As a state-run service it was expensive, subsidised and provided a poor service. Privatisation created a much better service.

The idea that the Government must provide telecoms gives me a hollow feeling in the pit of my stomach. I know I have one reader who works in Africa. The reason that mobile networks have spread so quickly throughout Africa is that the state-run phone system is chaotic, expensive and corrupt. It took a friend of mine seven months to get a phone line installed in Lusaka. When I was in Zimbabwe, the entire region I was in survived on one party line. If anybody else in the district was using the phone no-one else could.

Fortunately, I can fall back on a little more than anecdote. The water providers in the United Kingdom provide a perfect test case. The four regions have four different systems, ranging from fully private in England, to fully state-run in Scotland. On every indicator, from price, to leakage, to water quality, to reliability the privatised system is ranked as the best; the state-run as the worst. It's not quite QED, but it's not far off.

1 Comments:

Blogger Serf said...

Why should we believe that the Railways should be state owned when they were all built by private companies in the first place.

2:07 pm  

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