TOP Comments
  • Newcomer point
    Disaster is coming. Private control of public entities will raise prices and not really do a better job (income funneled into profit and high CEO salaries) . Imagine a toll road for the interstate. Business does some things better but we have government to take care of the common areas. Roads should stay public, just raise the gas tax and pay for it. People oppose raising a gas tax but go for privatizing roads and drilling national parks, stupid. Republicans have cut taxes (mostly for the rich) and are now throwing public ownership to the wind. Disaster is coming.
  • NBF Moderator point
    Why do they still own these assets anyway?

    It is estimated that the Feds own $20+ trillion in assets like these. They should sell them off - esp the high value ones like buildings and power authorities. End the socialism.
  • Expert point
    Great idea to fix roads etc, but they are betting on public-private equity. Sorry, but won't happen unless 100% private capital. First, the IRR is too low (even with a 10/90 equity/debt split) unless PE feels like losing money (opportunity cost of equal risk investments elsewhere). Second, these programs are notorious for being financial disasters. Investors need long term (20-30 year) cash flow surety. Politicians want to get re-elected. The two don't mix. Tolls on the road too high? No worries, we'll just lower them - oops we broke the contract and now have to raise taxes or borrow money to pay the contractor the difference....

    100% private can work (eg Dulles Toll Road). What the IIC (idiots in charge) ought to do is completely outsource the assets. The TVA is a great example. They are a standalone op and generating about 7% equity return. Pretty much in line with a big utility. Well run public company. Would cost about $7bn to buy and a nice long term cash flow. Can probably bump up returns to 9% just by clearing the underbrush.