I don't know what's Orwellian about it, but that's the general idea. A private company can only charge customers, a government can charge/tax everyone. So certain projects (ie ones that require infrastructure) may be to expensive for a private company to undertake if they get too few customers. But a group of citizens can get together and say "It would benefit the whole town if everyone/most had blah (water, electricity, sewage, postal service, internet, etc)". So once a certain majority agrees, a law is passed, and they can spread the cost out over everyone. So a well run government operation will be able to undercut a private business every time.
The issue is how well run the government can do things. With no competition there's room for pork, waste, etc. That why it's important to still allow private companies to compete in certain areas, and for there to be citizen oversight over others. For example, if your water bill gets too high you start throwing out the current bureaucrats to bring it back under control. My Dad's actually involved in doing that right now in his city.