Re:UK Rail services to come under unified state control
by bluGill on Thursday May 20, 2021 @09:40AM
(#27220968)
When the government will take away your franchise in a few years - as just happened here - that is the only sane thing to do.
Shareholders aren't stupid enough to invest in something long term unless their investment will have a return. Companies invest when there is a long term profit from the investment that makes it worth it. With governments all over the world having a history of nationalizing railroads, there is no rail investment that can be made with a time-frame beyond 7 years - and rail is up front expensive enough you need a lot more than a 7 year time frame on most investments.
Most of the railroads in the US were funded by 150 year bonds. (your history class talked about the government giving railroads 10 miles of land on each side of the track - but that was only a few routes in the west that got that, most rail in the east the railroads had to buy the land at market price). I assume most of the rest of the world was similar.
Shareholders aren't stupid enough to invest in something long term unless their investment will have a return. Companies invest when there is a long term profit from the investment that makes it worth it. With governments all over the world having a history of nationalizing railroads, there is no rail investment that can be made with a time-frame beyond 7 years - and rail is up front expensive enough you need a lot more than a 7 year time frame on most investments.
Most of the railroads in the US were funded by 150 year bonds. (your history class talked about the government giving railroads 10 miles of land on each side of the track - but that was only a few routes in the west that got that, most rail in the east the railroads had to buy the land at market price). I assume most of the rest of the world was similar.