Privatisation Advantages and disadvantages - Essay Example

edit privatization with reducing government debt and rebuilding both large and small industries, turning them from loss-makers into profitable, tax-paying enterprises. But this is only one face of privatization "Privatization", many experts also believe that total privatization is not exactly good for social support, in which the primary aim is delivering affordability and quality of service to society, and that the Govt. Sector is more suited to certain services than the Private sector because of their community service obligations and essential nature of certain commodities.

Privatisation is the transfer of control from government sector to private enterprises, and commonly involves complex contractual structures. The government can transfer control by selling 100% or less to an enterprise, so long as the private sector is given full managerial control. Privatization does not cover activities such as contracting out, leasing and private financing of infrastructure projects. (Guardian, 2008) The main principle of privatisation is to improve efficiency and competency of a countries economy, so that it can attract foreign investments and encourage local investments develop the domestic capital market, broad base ownership and mobilize long terms savings, reduce the fiscal burden of the treasury and in conclusion improve corporate governance of privatised enterprises by providing a constructive investment milieu.

(deliveri, 2008) Concession agreement this involves the process of granting a concession agreement, with specifics terms for a certain period of time, to the private sector to build a particular enterprise, exploit and operate it pursuant to the concession. Privatisation has several advantages as it seems to boost the economy of a country which leads to lower prices, improved quality, more choices, less corruption, less red tape, quicker delivery and ultimately adds to the year’s revenue. First and foremost due to the profit motive, privately owned