More on Infrastructure Sales

Yves Smith again:

Yesterday, we discussed a mundane reason to be leery of the sale of assets owned by the public to private parties: the outcome, almost without exception, is a ripoff. Even if the owners manage to orchestrate the bidding well enough to assure that the entity fetches a decent price, the cost of doing the deal and the investors’ return requirements assure that charges to the public will rise faster than if the property was left in government hands (and this does not preclude the owner scrimping on maintenance and service levels). Macquarie Bank has been the world leader in this business, and reader Crocodile Chuck gave some useful examples:

Ah, the Macquarie model! Clipping the ticket, at each step, and all the way through the route map from public good to ‘privatised entity’.
The Sydney Airport (a Macquarie Airports asset), boasts the second highest parking rates on Earth (not inherited with the operation; they levied this themselves). About $100 for eight hours (I’ve never used it, since it was sold down the river)
Highest: Budapest Ferihegy in Hungary. Owner: Macquarie Airports.

I happen to have flown out of Budapest last summer. The lavish fees most assuredly have not been reinvested in the physical plant; the airport looks dated and worn.

$100 to park?  At least Mitch Daniels is smart enough to force the new owners of the toll road to do a bunch of work on them and to only double the tolls while he is in office.  We'll see what happens afterward.