In most elections around the world, one or more parties running will call for infrastructure to be built and it will create jobs. In areas around the world, including not far from where you live there are plenty of examples where it did not quite work out. For those of us in the north east, we have trails through the woods where trains ran for a time. In Brazil there are examples and Leonardo Guy of Reuters recently reported about train tracks in northeastern Brazil for the Transnordestina. The railway was going to be a job maker; it was going to replace the trucks moving the crops; it was going to bring relatively inexpensive fuel to the region; it was going to do a lot of things, but the railway after 10 years of building has cost $2.4 billion dollars and is only half done its 2000 mile journey.

The new government believes in P3 or private public partnership with the private paying the bill for new infrastructure. It is important to note, the private part always wants a monopoly for up to 30 or more years to ensure a good return on their investment and then the infrastructure can be owned by the government, but maybe they will need someone to run it afterwards? Can the railway be built, as long as there are commodities to ship profitably, there is still a need for a railway.

Linking to dividend paying stocks, there are many dividend companies which run public assets for a profit and the stocks pay dividends. The key is the monopoly like conditions and good management. The railway in Brazil highlights when the politicians call for infrastructure not everything should be built, but if the government is willing to hand over the treasury for good conditions and good management, private companies will embrace the government’s goals.

There are more questions than answers, till the next time – to raising questions.