Malta has its own bus service. It is run by the government. It's losing money left, right and center, or at least this is what the newspaper Malta Independent reported in its article "Government-run bus service loses EUR 3 million".
It would seem that between January and February this year alone, the bus service lost 3 million EUR. Of course, we don't know what the total damage will be, since March figures have not been "reconciled" yet (will there to be kisses involved?).
Well, so far this is not news. A government-run service that is broke. What is news though, is what happened afterwards.
It would seem that not one, not two but three companies submitted bids to take over the bus service!!!
How strange, don't you think?
Here we have a service that it is apparently non-financially viable (i.e. bankrupt) that private companies are tripping over each other to buy into. Have suddenly Maltese companies and entrepreneurs gone mad? Don't their financial calculators work any longer?
Or, as usual when the government is involved, there is more to the story. We think the latter.
We suspect very strongly that the bus service is indeed un-profitable because it is managed by the government and, as we all know, governments do not concern themselves with profit and loss statements. Why should they when they can print or borrow their way out of any problem? Or at least they think so.
Governments operate on the basis of no-ROI (no Return On Investment). They assume that wealth is infinite and one way or another money "will be made available". Because of this mentality, because governments are driven by political (hence vote maximizing) considerations, they cannot perform economic calculations exactly in the same manner as Communists could not (see Communists Can't Count). If they cannot perform this calculation and all budgets are fictitious and make-belief, then situations as with this one will happen all the time.
The point we are trying to make is that governments are by definition not-economically viable. It is not a glitch, a problem that can be fixed. It is inherent to the government process and politicians' thinking. It cannot be fixed without destroying the political process itself and … here is hoping!
But, as politicians will be politicians, let's disassemble the thoughtful statement that the Maltese Transport Ministry issued:
"Our aim is for the company chosen to be a serious one…"
Unlike the boneheaded bureaucratic incompetent people that have been mis-managing the bus service so far. Got it.
"…that provides a sustainable service,…"
Not like ours which is virtually and really bankrupt and it is not sustainable. Message received.
"…a service that meets the needs of the public…"
A service that is different from ours since we managed to provide a service that nobody wants in sufficient quantity, otherwise it would be sustainable. Understood.
"…and increases patronage"
Which we could not do regardless of the army of bureaucrats at the head of the service which, for some strange reason, seem to believe that people will behave according to their plans. Let's make a note of it.
"We want a reliable service and an efficient service…"
Which we could not provide so far even throwing buckets of taxpayer money at the problem. Lesson learned.
"…that also considers economic and social aspects."
Yeah. Let's not forget all those votes that will go away if we dare to make changes to a service that people can't afford to have.
In summary:
The ministry wants a service that is better than the one that exists today, at a lower ticket price that will attract more people, provide better service and ensure votes won't go to the other party.
Anytime now.
And how many of those will the gentleman take? Should we wrap them as presents or are they to go? We can deliver right away!
Let's be serious for a second here. The government is setting-up the next company for failure. Whatever they do, it won't be enough because the primordial, the principal, the first, second and third priority of the government will be to keep votes.
To this regard, they will regulate the company to death.
The truth is that if there are three companies killing each other to get the service, this means that it is profitable and that the government is driving it into the ground.
Furthermore, this indicates that there is an artificial bus monopoly imposed by the government. If this would not be the case, the companies would have set-up their own buses long time ago!
So, here you have it. A government sets-up an artificial monopoly, it badly mis-managed the whole thing and then demands the impossible from market forces excluding competition.
Hummm… how long do you believe, dear reader, will take the new company to go broke? We are taking bets.
The surprising fact is not that the Maltese government acted in this way. The surprising fact is that so much of this is SOP (Standard Operating Procedure) that nobody blinks. It is routine. Just another government boondoggle going astray.
The point is that nobody is safe anywhere in the world. The point is that all governments are equally bad. The point is that all these government practices are not exceptions but the widespread rule that cannot be fixed.
Malta or the US. Brazil or China. Russia or Japan. South Africa or Finland. It makes no difference, we are all in this strange boat called earth and, to make matters worse, we are adrift with 193 megalomaniac lunatics in control. And there is always somebody expecting something different. Silly people.
Note: please see the Glossary if you are unfamiliar with certain words.
