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New Enforced monopoly
These deals are almost sure to be a bad idea in the long run. Politicians like them because they allow states to run at a deficit for a while, selling fixed assets for a lump sum to finance state programs. Once the assets run out the state will be doubly screwed.

The companies buying these items plan to make money by raising rates. Generally there is a clause in the contract that limits the amount they can raise per year, but that simply delays the arrival of high prices until the current politicians are out of range.

Not surprisingly, these deals come with a maze of a contract. Things like future fees, taxes and access rights have to be spelled out in great detail. Typically hidden in the mix are nasty clauses like restrictions on the state doing anything that would restrict usage of the purchases infrastructure, down to the level of the state being forbidden from improving or building any roads that might draw traffic from the one they sold.

Jay
New We've seen that in Aus in recent years, too.
Private enterprise built two of Sydney's motorways, the [M4|[link|http://en.wikipedia.org/wiki/M4_Western_Motorway|http://en.wikipedia...._Western_Motorway]] and the [M5|[link|http://en.wikipedia.org/wiki/M5_South_Western_Motorway|http://en.wikipedia...._Western_Motorway]]. Both require a toll, but the current Labor government when they were last in Opposition promised to remove the toll on the M5. When they got into government, they discovered they contractually couldn't. So instead, we have a CashBack scheme.

The second one was the [Cross-City Tunnel|[link|http://en.wikipedia.org/wiki/Cross_City_Tunnel|http://en.wikipedia....Cross_City_Tunnel]]. The contract issues between the road-builder and the state government made news items night after night, regarding things like road closures and and toll-price.

Wade.


Is it enough to love
Is it enough to breathe
Somebody rip my heart out
And leave me here to bleed
 
Is it enough to die
Somebody save my life
I'd rather be Anything but Ordinary
Please



-- "Anything but Ordinary" by Avril Lavigne.

· my ·
· [link|http://staticsan.livejournal.com/|blog] ·
· [link|http://yceran.org/|website] ·

     A whole new way we can get screwed - (tuberculosis) - (6)
         Why would I like this? - (bepatient) - (1)
             Well the Boulder Turnpike - (tuberculosis)
         Wrong link? -NT - (warmachine) - (1)
             Story changed. Cool -NT - (bepatient)
         Enforced monopoly - (JayMehaffey) - (1)
             We've seen that in Aus in recent years, too. - (static)

Try to look unimportant; they may be low on ammo.
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