A Tale of Two Networks
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10:26 pm, May 21st, 2012 - 4 comments
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Wellington’s electricity network was privatised 20 years ago. The water network wasn’t. Tomorrow evening (Tuesday 22 May) researchers Peter Harris, Dick Werry and Jim Turner will present their outcome comparison to a Fabian seminar at St John’s Church Hall in Wellington at 5:30pm. Water network costs rose by over the period, electricity network costs by four times that amount. The reach of both networks is similar – the lesson is that the required return on appreciating assets from privatisation drives up the costs. All welcome to come and discuss. You can register here.
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FIFY
Water network costs rose by over the period, electricity network costs by four times that amount.
Rose by how much?
They found out the same in the UK for the privatised rail system. For the track system which had a single owner – the government getting it back after the private operator went bust- the costs of rebuilding existing tracks had an enormous jump when using private contractors for the new track operator compared to the days of British Rail.
Why bother with comparisons of water and power networks when we have comparable private and public power line networks in nz, and private networks with substantial public ownerships. wouldn’t looking at their relative performance be far more relevant and the evidence more obvious and compelling than comparing a completely different utility? Seems like a very clumsy basis for comparison. They wouldn’t be trying to reach a preconceived conclusion surely….
And I suspect water has lower penetration than power – there are plenty of people in urban fringe areas on water tanks but few not on mains power. A better comparison would be with phone networks.