Reply #6: Re-Nationalization NOT Necessarily for the Best

[Vogon_Glory]

We can hope that the re-nationalized Bolivian railroads are as well-run as the recently privatized ones. However, considering what happened to a couple of government-owned railroads elsewhere in Latin America, we can hardly predict a guaranteed success.

In Ecuador, the former state-owned railroad network has mostly stopped operating, with the exception of a tourist operation near Quito. Aside from formidable foreign-exchange problems and the fact that the Ecuadorian railroads had lost money for years, the Ecuadorian property has been literally run into the ground. Taking care of track was neglected, the locomotives were badly-maintained, and the engineering needed to keep even a second-rate railroad was sorely ignored.

In Argentina, the meter-gauge railroad linking Bolivia to the Atlantic has gone well down the road to ruin. Again, the same problems: lack of maintenance of track, locomotives, and rolling stock. The result: what traffic the eastern Bolivian railroad sends to the Atlantic goes through Brazil, not Argentina.

In both cases of nationalized Latin American railroads, maintenance and more importantly marketing were sorely neglected. If you are going to run trains, you have to have and keep customers. This is as true in Latin America as it is in El Norte.

The problem with Latin-American government-owned enterprises is that they are seen as primarily as employment agencies first and foremost with the idea of actually OPERATING the railroads and MAINTAINING them as secondary or tertiary concerns--if that. Unlike kill-joy Anglos, many Latin American government-owned railroads (Not all of them, of course) are more interested in keeping guys on the payroll than in either seeing that they actually do any work or even that the trains actually run or that the track and equipment is actually maintained.

I want to be wrong about my bleak view about the future of Bolivia's railroad network. I want Morales' re-nationalized Bolivian railroads to be run efficiently and at least come close to break-even. But the historical record is no great cause for optimism.

:argh: