And public works such as roads and bridges also apply to my argument. For example the infamous "bridge to nowhere". A lot of these projects are a waste of resources. If the private sector were in charge of building roads/bridges they would be much more inclined to make sure they were actually needed and good investments.
In my post I reference an earlier short essay on mega projects
http://www.victusspiritus.com/2010/01/13/think-bigger-short-...
Some projects entrepreneurs can't build unless thousands of them get together. Many of these mega projects have resulted in very long term benefits. Hoover Dam, Panama Canal, Lunar Mission, DARPAnet are just a few ideas which entrepreneurs can't possibly tackle on their own, even massive corporate IR&D budgets can't be risked on such endeavors.
Also, the government is generally lousy at PR, and people rarely understand how to connect the dots. The internet, (or specifically, world wide web), and google are good examples of things fostered initially by the government. Whether or not they might have happened without the government is debatable, but they did happen, and the government did help. The wins are far less visible than the failures.
There are some problems - do you allow compulsory purchase of land? If not then a single person can ransom your project if you do then you need government approval for each project. Upto 25% of the cost of some 19C railways were in legal fees to get the legal acts needed to build them