[xg15]

Did the government actually declare the plan over or did independent studies actually show it didn't work?

The problem is who decides whether a solution works or doesn't work? Because the goals of the general public, government and private companies may not necessarily be aligned here. Taking the govt subsidiary is submitting to the government's goals in that regard - so if the company drops out again because that project isn't conductive to its own goals, that's all fine, but it should indeed pay back the subsidiaries.

[throwaway11460]

Subsidies typically have rules, such as "will employ X people for Y years" or "will provide the service for X years". Subsidies are also very often paid out after the fact, but even if not, this is a very easy court case (probably not even that - just administer a fine).

So if they're closing down now, it's very likely because the date has passed and they met all requirements.

(I have experience with subsidies, though in EU)

[bawolff]

If incentives are that misaligned it will never work.

The way it should work is company puts some money in, gov puts some money in. Company money still on the line to incentivise actually doing a good job, gov money just lowers the threshold a bit. If no company money on the line, they will just pretend to do the thing.