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Lessons from Seoul's controversial privatized subway line

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Re: Lessons from Seoul's controversial privatized subway line

#51

Post by refurb »

Singapore’s MRT is run (ticket sales, customer service, train maintenance, etc) by two private companies. Like the public hospitals in Singapore, the government intentionally split it up to encourage comparison and competition.

The reason why it works pretty well is: 1) the government sets KPIs and actually enforced them on a very regular basis, if disruption occurs, you’ll see the govt start asking questions right away and 2) the government won’t hesitate to pull the contract and give it to another company.

Contrast this with the monopoly given PG&E, how embedded it is with the government and how they grease each other’s palms.

Re: Lessons from Seoul's controversial privatized subway line

#52

Post by robjan »

secondaryacct wrote: post #25
bjeds wrote: post #9

I have a hard time following this article because it's so obviously one-sided and ranting. FWIW the Stockholm Metro is also privatized in the sense that operation, planning and maintenance is done by MTR Corporation, the same company that owns and operates the Hong Kong Metro. MTR also operate a lot of other subway systems in the world, for example Sydney. I don't see any problems inherit in the privatization: Stockh…

Yes MTR here in Hong Kong is quite respectable: the subway works well, the price is cheap, the company redevelop a lot around stations, it's a model of proper corporate management of public infrastructure. The only snag they faced in my 7 years here is when they were caught in the crossfire during the protest: at first they would help evactuate protestors during police intervention but then the police asked them inst…

MTR Corporation is 75% owned by the Hong Kong government and receives subsidies in the form of land leases granted below market value and a monopoly on rail infrastructure. I really appreciate the MTR, and am also a part of the 25%, but it's not really a truly private company.

Re: Lessons from Seoul's controversial privatized subway line

#53

Post by andylynch »

Fizzadar wrote: post #2

Fascinating story that highlights the issues with privatised transport systems (or worse: mixed private/public). Reminds me of the clusterfuck that is the British rail network. That said, the Northern and Central tube lines (London) are often crowded/hellish like this and are public, I dread to think how awful the tube would become if privatised!

Funny thing is, most of the tube was privately built. It was bought out by the government in 1933 after the market failed.

And for a more recent example the PPPs for maintenance of the tube set up twenty years ago.

Re: Lessons from Seoul's controversial privatized subway line

#54

Post by noobermin »

aga98mtl wrote: post #24

I'm confused by the article. The main problem is that the line is too popular because the government under estimated ridership? How does this have anything to do with it being privatized? When they tried raising prices the city fought them? Should you not raise pricing when you have more customer than capacity?

Have you ever considered having more cars to deal with capacity vs raising prices?

Re: Lessons from Seoul's controversial privatized subway line

#56

Post by toolcombinator »

And btw: This whole debate is outdated, and like something out of a socialist pamphlet ca 1995.

Public vs. private transport has mostly been settled, and the private sector won.

All over Europe and in much of the rest of the world, public transit is operated by private companies. (Usually with great results.)

There’s no way governments would start nationalizing tens of billions of dollars worth of infrastructure in a time where finances are already stretched.

Re: Lessons from Seoul's controversial privatized subway line

#57

Post by toolcombinator »

snidane wrote: post #3

Great article. Introducing privatization into networks and expecting solving the centralized government laziness by markets ia a bit naive since on networks you won't have competition. You are only introducing a market of 1 monopolistic player. At that point thr outcome is the same - the uncompeted excess profits being eaten by a corrupt government or by a monopoly company. If you want competition on networks then co…

I don’t mean to be rude, but your theoretical “1 monopolistic player” goes against practical experience.

Let’s look at how privatization works in for example Europe.

One (private) company owns the infrastructure (the actual railways) and private companies pay them for usage.

The same private companies make bids on operating a particular bus or rail system, in some cases competition is open, and anyone can start a new long distance bus service.

So you have (for example) Dutch companies running bus systems in the UK or Sweden, or German railway companies running trains in Denmark or the U.K.

Re: Lessons from Seoul's controversial privatized subway line

#58

Post by strikelaserclaw »

My take is that you either privatize something entirely and leave it up to the "free market" or you don't but it seems like in this case, it was half assessed privatization with heavy government interference, so you got the benefit of neither system.

Re: Lessons from Seoul's controversial privatized subway line

#59

Post by em-bee »

sokoloff wrote: post #38
em-bee wrote: post #36

Earlier quoted context omitted.

depends on your goals. when prices are raised then the poorer segments of the population, who are usually the ones that need public transport the most, may not be able to afford to ride. it's one thing to raise prices to cover costs, but quite another to raise them to reduce congestion.

In this case, it’s presumably (at least in part): raise prices to be able to pay for more rolling stock that the government doesn’t want to finance because part of the benefit will accrue to the private operator. If a government doesn’t want a private operator to be able to turn a profit on an incremental investment, that government shouldn’t be surprised when they decline to make that investment. I agree that in the…

right, i was specifically focusing on the idea to raise prices to reduce the number of people wanting to buy a ticket. if prices need to be raised to cover costs and keep a reasonable profit then that is a different issue. in that case, if the government doesn't want prices to be raised it needs to subsidize.

Re: Lessons from Seoul's controversial privatized subway line

#60

Post by em-bee »

rdtwo wrote: post #41
em-bee wrote: post #36

Earlier quoted context omitted.

depends on your goals. when prices are raised then the poorer segments of the population, who are usually the ones that need public transport the most, may not be able to afford to ride. it's one thing to raise prices to cover costs, but quite another to raise them to reduce congestion.

My city does this with public roads… in the good old west coast USA.

sure, but that's the point. it is the city making that decision, not a for-profit company.
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