I seem to remember reading that something similar happened with fiber optic cable in the nineties. Companies like Qwest (I think? Something like that?) Laid down thousands of miles of fiber, but went under in the dot com bubble. The fiber was then bought up on the cheap, bringing down transmission costs.

My recolection is hazy, so I might be totally wrong.

> The big example is railways - all the original investors lost their money.

Can someone build up on this?

https://en.wikipedia.org/wiki/Railway_Mania but more recently the Channel Tunnel, which makes a small operating profit these days but also lost most of the original investment and went through bankruptcy: https://en.wikipedia.org/wiki/Eurotunnel

(The railway mania wikipedia page even blames low interest rates for it! Personally I'm of the opinion that the government can set its bond coupons to whatever it likes and investors are not owed a minimum return, but there we go)

Edit: since the original comment was quite popular, I'll make some forward-looking statements: there is likewise a lot of investment which needs to be done in order to decarbonise, has major social benefits, but will not necessarily be profitable in the market. Even the highly distorted market that is energy. It may turn out that substantial negative interest rates are needed to finance the transition.

Happened in Toronto ... last year.

Built a half Billion dollar express railway line from airport to downtown, funded 100% by taxpayers, and no one was riding it because the fares were too expensive. Had to lower fares and now it's bleeding money (but people are riding it).

http://www.theglobeandmail.com/news/toronto/metrolinx-to-sla...

Also the overprovision of fiber-optic network capacity in the U.S. telecom market in the late nineties: https://www.princeton.edu/~starr/articles/articles02/Starr-T...

Is it because there was not enough demand from consumers to justify the cost, but that rail was too important a piece of infrastructure that it couldn't just go away? I mean the top performing asset class for Berkshire Hathaway had been railway for a long time, albeit carriers not rail infrastructure.

>The railway mania wikipedia page even blames low interest rates for it! Personally I'm of the opinion that the government can set its bond coupons to whatever it likes and investors are not owed a minimum return, but there we go

It's not about opinions but cause and effect.