Comments on: Carlyle descends into a public-private inferno Mon, 26 Sep 2016 03:26:00 +0000 hourly 1 By: haarmeyer Tue, 08 Apr 2014 16:32:10 +0000 I think it is important to make it clear just why Carlyle, not the local government, is in the better position to own and operate the water utility. Unlike the local government, Carlyle with both the personal wealth of its managers and its institutional investors at stake, has a powerful incentive to operate the utility efficiently and increase its value to make a profit when it is sold. The fact that this is the business of Carlyle puts an added pressure on firm — its future business is at stake if the firm’s reputation for increasing the value of assets is tarnished.
Nothing like these incentives are at work when a government owns and operates a business, which is a leading reason why “our” infrastructure is in the shape it’s in. The role of government is generally to regulate private operations—not be put in a conflicted position of regulating itself.
David Haarmeyer