Privatize the rail network?

[DigenisAkritas]

Greece's rail network is running a huge deficit, well in excess of a billion Euros. Germany's rail network is not, it operates a tidy profit and even still, the Germans are planning for a partial privatization to increase efficiency and private structures of competition.

So, my question is thus, Greece's antiquated rail network would obviously benefit from privatization. So why not do it?

[MetroGuardian]

The problem is that it is not so obvious.

First of all because it is extremely difficult to construct new lines in Greece, except if you are the state and can do it by force (Land expropriation).
Secondly because it is almost impossible to have pure competition, in the sense of multiple competitors, and this privatization will result in an oligopoly. This is due to the scale of the capital that is needed to be invested in order to have profits.
Thirdly because there are other examples where railways privatization has failed to deliver its promises (e.g. U.K.). So it is not for sure that it will be helpful in Greece.
Last but not least, OSE has probably even more problems than Olympic-airways, that stem from a huge workforce and strong unions. It will be difficult for the private business to fire excessive workforce, to pay premiums or bonus (either cut wages), introduce automations that make some positions obsolete and so on.



Still, I have to stress that most of the big railway systems started as investments of private businessmen and were further on nationalized (and further on, some of them, privatized again). However, I am not sure, for the case of Greece, that it would be profitable or sensible to do something like that. It seems to me, more a technical, rather than an ideological case.

[Sodnal]

All the railways in Japan were privatized several years ago. Hasn't affected their performance, but I'm sure they had to fire a few deadbeats along the way.

:banana:

[DigenisAkritas]

All the railways in Japan were privatized several years ago. Hasn't affected their performance, but I'm sure they had to fire a few deadbeats along the way.

:banana:

I like your thinking Sodnal, Greece could do with a healthy dose of free enterprise.