Comment by rwmj
11 days ago
In the West some private equity company would be buying these up, selling off the land and separate businesses, and screwing the rail passengers for all they can, until the whole thing sinks in a sea of debt. Then repeating the formula.
Japan railways are mostly (all?) privately owned.
Yes.
From the article:
"Today, the most striking institutional feature of Japanese rail is that it is privately owned by a throng of competing companies." ...
"Core rail operations are profitable for every Japanese private railway company, but they usually only account for a plurality or a small majority of revenue. The rest is contributed by their portfolio of side businesses."
It's like a textbook good application of capitalism that unsurprisingly the US can't seem to get right.
But by companies that care about running railways, not by vultures that want to rip the companies apart and load them up with debt for their own short-term profits.
So western MBAs are the problem. I’ve long held this view.
JR was only privatized in 1987 after the previous state owned railway company borrowed too much to fund its infrastructure projects like high speed rails.
The japanese railroads are owned by private companies.
Yes. How would private equity buy them unless they were private companies already?
The point is that Japan has a well-established private-equity industry [1] so the fact that PE firms haven't ruined Japanese railways suggests that PE firms aren't universal corrosive solvents like you seem to want us to believe they are.
[1] https://flippa.com/blog/pe-funds/japan-private-equity-firms/
3 replies →
By privatizing them. Look at European rail in the past 50 years.
I thought the rails were owned by the government, leased to the companies?
Some of them are, like the Shinkansen lines. Others are both owned and operated by private companies: https://en.wikipedia.org/wiki/T%C5%8Dkaid%C5%8D_Main_Line.
Additionally, the stations are generally owned by private companies—including the the development rights at the station. This means that the Japanese private rail companies capture a portion of the value created by the rail service, which otherwise would be an externality. So the companies have an incentive, as landowners, for rail ridership to stay high.