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Strategies & Market Trends : Booms, Busts, and Recoveries
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To: tradermike_1999 who started this subject7/20/2003 3:05:34 AM
From: Seeker of Truth  Read Replies (2) of 74559
 
Jay Chen recently bought shares in toll road companies in China. As the trucks and cars increase in China, so will the tolls increase. Sounds beautiful. But I wonder. The Chinese government favours competition or anything else that will lower prices. Recently there was a regulation forbidding companies like CEO and PTR from agreeing, even temporarily, on a fixed oil price. Multiple telephone company licenses have been granted for the same kind of purpose, to lower prices on phone calls. I know a chemical company that wanted to build a plant in China to manufacture a certain insecticide. Serious negotiations began but in the end were not successful. A key sticking point was that the government wanted an upper bound to the selling price of the insecticide in China. Phone calls and oil are things that everybody uses in industrialized countries. Are not roads the same? If the roads are sufficiently profitable would not licenses be applied for and granted to build new roads that would be largely parallel to those three roads? Or high speed railroad lines be set up to carry the containers that many trucks carry? If there is some feeling that the tolls are an obstacle to economic development would the government not institute price controls on the tolls? Sometimes monopolies are not the safest investments. Does anybody know the history of privately owned toll roads in countries other than China?
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