| This is some nice theory. In practice there are dozens of players bidding on infrastructure assets globally. The assets tend to be easy to model, easy to finance and hence finance types (like all the PEs, pension funds etc) love them. Here is a starting point: https://pitchbook.com/news/articles/pe-most-active-investors... https://www.peievents.com/en/wp-content/uploads/2019/10/30_1... https://docs.preqin.com/newsletters/ra/Preqin-RASL-August-16... No one bidding on these assets is giggling about how much money they are going to make. They are thinking "we are bidding a lot here, these returns don't look so hot, how can we justify this??" and then praying their projections aren't off on the downside. At least, in the first world. There does appear to have been some shady dealings in Russia, Mexico etc in the 90's. |
Beyond that you can find plenty of exceptions in first world countries of underbidding paying off, though mostly at the local scale. For a specific example look at US high speed internet a little closer and you can find taxpayers getting screwed.