How is it that an industry cannot be run as a nationalised one, because there isn't the money to do so. But run as a privatised business, it pays out dividends?
This industry is (in theory) making a profit - so why isn't it self-funding when it is run for the purpose of providing the service, rather than run for the purpose of making money?
Because when nationalised it relied on however much the government gave it. The government did this with public borrowing, but even then it was not enough to fund a lot of what was needed.
Privatisation funds these things through loans and investments, both of which the industry is required to pay back with interest or equity dividends. That's the cost of raising capital this way, and is done to ensure that customers don't have to foot the massive bill up-front. Their bills do go toward it, but over a much longer term.
It's also why we're prevented from investing LOADS of money in the infrastructure, because that investment would come with guaranteed returns and too much of that would then impact the customers.
The industry *is* being run for profit, but making that profit requires successfully delivering the services.
In addition, the profit itself is very small in comparison to other companies, and an ever-increasing chunk of that gets diverted into OPEX.
That's kinda the extent of my knowledge on corporate finance type stuff, but I could probably find you some links with more detail.
Whilst i am antiprivatisation of public services i also agree you make a good point.
I guess this may be cakeism but i like to believe that well organised and "profitable" and Nationalised do not HAVE to be mutually exclusive.
Privatisation in theory is the best option.
However, we went from a national monopoly to a privately owned monopoly. There's no competition.
You want national control and ownership, but private funding and operation... not forgetting a regulator that actually has teeth and is run by a competent crew.
back in the day my dad did some building work - as a subcontractor - for the water board. He said the levels of waste (as in equipment waste not effluent) and mismanagement was disgusting and after seeing that is one reason he supported privatisation.
Pretty much all the Old Guard, who worked in this industry before privatisation, and most of the newer generations agree it's far better private. Despite many of those OGs having better conditions and perks when they were local authority employees, the things they're now able to do are so easy it makes their job much more rewarding.
You can tell the Old Guard, as they still all clock off at 3pm on a Friday to go down the pub!
