Privatization

The result is again a picture of public enterprise that operates with higher costs and lower productive efficiency than comparable enterprises in the private sector.
             But what really is this phenomenon called privatization? Privatization is the shift of functions, activities and responsibilities from the public (government) sector to the private sector. It involves a process where the government gradually and progressively eliminates their involvement in direct service provision while maintaining responsibility and authority over key functions such as standardization, certification and accreditation. Privatization can also be viewed as the process of changing ownership of government companies (Public Enterprises) to private ownership through the sale of the share of such companies to individuals who will manage the companies efficiently and profitably.
             One has to be careful not to confuse privatization and commercialization. Privatization involves the sale of a government-owned company to private investors or individuals who now become the new owners, while commercialization involves changing the way government-owned companies operate to ensure that they run commercially and that they make profit. The basic difference is in their ownership structure.
             Privatization may take several forms and some of the most prominent ones include:.
             (1) Full Privatization: The service is provided by the private sector and entirely paid for by clients or customers.
             (2) Commercialization of Government Services: The service remains within the government but is fully or partially paid for by clients or consumers.
             (3) Public-Private Partnerships: A government asset is leased to and managed commercially by a private sector company.
             Privatization can be looked at with a two-fold aspect. With regards to privatization there are two main parties involved: (1) government and (2) the community. From the viewpoint of the government, the objectives of privatization are to reduce the government's administrative and financial burdens with respect to providing services.