QUOTE(779364 @ Oct 14 2013, 07:34 PM)
which comes back to what I said in my post. If a company has total monopoly of the train business and still make a loss, baik tutup saja.
A smart firm will be able to fully monetize its asset rather than letting it lay dormant or generate zero income while still setting reasonable fare.
then you kinda lose the point of glcs (or state owned enterprises, in other countries).
it's like this: certain services are intrinsically unprofitable - like postal services, utilities etc - especially in small market and more so in rural areas. the only way to provide these services is to up the price or basically not provide that service at all.
now, if there isnt any glc-loss-making-monopoly running, you'd only see services in the urban areas. not just transport, but also of basics - electiricty, water etc. if i were the owner of tnb, i would never invest the capex to connect the poor rural areas because i'll never earn the money back.
and if i were the owner of tnb, i'd maximise my profits - i'd charge as much as i want for the electricity (actualy as far as mc=mr). you cant pay? too bad. hospitals need electricity? then you better charge your patients more to afford my bills. my responsibility is to my shareholders - and since i'm the owner, that means me.
so then you'll have the people calling for the govt "oh please nationalise tnb and make it state-owned so that we'd get cheap electricity and we'll give you our votes" - and we're back to square one.
This post has been edited by empyreal: Oct 14 2013, 07:43 PM