All Aboard the Privatization Train

With the expiration of the current federal highway bill in a few months, the infrastructure issue is heating up. Newspapers are ginning up interest with stories about deficient and falling down bridges (e.g. here and here).

Diane Rehm kindly invited me to her NPR show this morning to discuss how we should move ahead with financing infrastructure. I pointed to the advantages of devolving funding to state governments and the private sector. America should embrace the global movement towards privatization and public-private partnerships for highways, bridges, airports, and other facilities.

Even Japan—previously known for its pork-barrel infrastructure spending—is beginning to embrace privatization, notes this piece at NextCity.org (h/t Nick Zaiac):

Over a 15-year period starting in 1987, the Japanese government undertook one of the most ambitious privatizations in history, moving its most heavily traveled railways from public ownership into private hands. The privatization of Japanese National Railways – whose assets on Honshu (Japan’s main island) were split into three separate companies (JR East, Central and West, each centered around one of Japan’s three major metropolitan areas) – was a roaring business success. JR East, which runs commuter, intercity and Shinkansen lines in Tokyo and the surrounding region, doubled its revenue over the 15-year period, cut its payroll by a third, upped its per-capita passenger-miles by two-thirds, all while cutting the number of accidents by nearly 60 percent and keeping fares more or less flat.

Now Osaka, Japan is looking to repeat the magic, but this time on its city subway network – which, if successful, would be the first government subway system in the country to be sold off.

… The move follows on the heels of the sale of another one of the prefecture’s railways, the … Semboku Rapid Railway.

… Not to be outdone, the Tokyo Metropolitan Government is considering selling its 46.6 percent stake in Tokyo Metro.