...PRIVATISATION Definition of Privatisation Privatisation means inducing private ownership, management and control into public sector undertakings. It is opposite of nationalising private firms. It implies disinvestment in public sector units and passing of management rights to private entrepreneurs. In some cases the management and control of public undertakings may be transferred to private sector without transferring the ownership. Importance of Privatisation * Improvement in efficiency: -The motive of private enterprises is to maximise profits. Therefore, they have to improve efficiency and performance without the competitive forces. * Raising Funds: -By selling government equity to private sector it is possible to raise funds for public investment. * No political influence: - Once a public sector is privatised it becomes free from political, ministerial and government intervention. * Quick Decisions: - In private sector organisation quick decisions can be taken to respond to changing circumstances. * Better Service to the customers: -The survival and growth of private sector enterprises depends on consumer satisfaction. Therefore they try to provide better quality goods and services to their customers. * Quick remedial measures: -In private sector enterprises quick remedial measures must be taken to avoid wastages, losses and to secure benefits from business opportunities. There is no scope for red tapism. * Easy to fix responsibility:...
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...Privatization: Administrative Process Privatization, to be successful and sustained, needs to be recognized as a legitimate action that will bring wide-spread benefits. There are many examples of privatizations that have been delayed for years, or simply abandoned, because they lacked political support or were considered to be proceeding in an unfair manner. In addition, around the world there are many examples of firms that have been privatized and then subsequently re-nationalized. Particularly in a regulated industry, such as infrastructure industries, there are also many ways, short of complete re-nationalization, to re-appropriate some of the value of a privatized company. The security of property rights and the credibility of regulatory contracts depends significantly on public notions of justice and fairness. Privatizations that involve selling assets at unreasonably low prices, to favored investors, for secret forms of side payments, undermine the legitimacy of the property rights that privatization attempts to create. Moreover, privatization often can play a key role in building private capital markets, which depend crucially on formal and informal rules, promises, trust, and investor confidence in shared understandings. Corrupt privatizations raise the cost of capital and hinder the development of capital markets. Privatization is most likely to be successful with active political leadership and initiative. These factors are apparent in the privatization of Kenya...
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...negatively towards MAS financials. The former prime minister of Malaysia, Dr Mahathir Mohamad said that the national flag carrier should be privatised as it is running at a loss. The Malaysia Airlines System Employees Union (Maseu), on the other hand, strongly stated that they will only support the privatisation of MAS if there is to be a new management team. In the past 12 years, MAS has undertaken about half-a-dozen restructuring exercises. Considering its current situation, the idea to privatise is seen as a necessity. In your opinion, can MAS turn itself around if it is now to be privatised? Why or why not? Justify your stand and support your arguments with reasons and examples. You should write between 600 and 650 words. Instructor: Mrs Anuratha Murugagoo On 8 August 2014, Khazanah Nasional Berhad (“Khazanah”) proposed an official petition to the Board of Directors of Malaysian Airline System Berhad (“MAS”) to handle a particular capital cutback and refund apply (“Proposed SCR”) of MAS’ ordinary shares. It shows the strategies of Khazanah National to privatise Malaysia Airlines (MAS) in an effort to recover the federal carrier while it was striving financially. Privatisation can be defined as the trade of public service to private business or the agreement activities of a public service through a private body. Currently, MAS faces financial problems due to the...
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...THE UNIVERSITY OF NOTTINGHAM Centre for Risk & Insurance Studies Privatization of the Insurance Market in India: From the British Raj to Monopoly Raj to Swaraj Tapen Sinha CRIS Discussion Paper Series – 2002.X Privatization of the Insurance Market in India: From the British Raj to Monopoly Raj to Swaraj by Tapen Sinha, Ph.D. ING Comercial America Chair Professor Instituto Tecnológico Autónomo de México Mexico City, Mexico and Professor, School of Business University of Nottingham, UK tapen@itam.mx, tapen@nottingham.ac.uk Abstract We examine the institution of insurance in India. Over the past century, Indian insurance industry has gone through big changes. It started as a fully private system with no restriction on foreign participation. After the independence, the industry went to the other extreme. It became a state-owned monopoly. In 1991, when rapid changes took place in many parts of the Indian economy, nothing happened to the institutional structure of insurance: it remained a monopoly. Only in 1999, a new legislation came into effect signaling a change in the insurance industry structure. We examine what might happen in the future when the domestic private insurance companies are allowed to compete with some foreign participation. Because of the time dependence of insurance contracts, it is highly unlikely that these erstwhile monopolies are going to disappear. Acknowledgement: I would like to thank Rebecca Benedict and Samik Dasgupta for their input in this article...
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...Privatisation of the Insurance Sector Printer-friendly version Worker's Opposition Gaining Momentum Lakhs of insurance employees have been waging struggle over the past two months against the introduction of the Insurance privatisation bill in parliament. On December 1, a country-wide strike was observed. Earlier on November 29, massive rallies and dharnas were staged in Delhi as well as all the state capitals. On October 30th, 2 lakh insurance sector employees staged a nation-wide strike to oppose opening up of the insurance sector to the plunder of private and foreign capital. Earlier a petition on behalf of the 1.5 crore insurance employees had been placed in Parliament. The ruling class is particularly desperate to get this Bill passed because, firstly it would open up a whole new lucrative sector to the Indian and foreign big finance capital. The present size of the Indian insurance and pension funds market is Rs. 40,000 crores, but research studies have predicted that it has a potential of Rs. 70,000 crores. Secondly, the Bill is supposed to signal to capitalists around the world that the Indian bourgeoisie has now installed a "stable" government at the centre and that it will be speeding up the reforms - a demand that was placed as a precondition for any party to be elected to power in the recent elections. The Bill, if passed, will open up the insurance sector to private capital investment with up to 26 percent ownership by foreign multinationals. It would further...
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...Insurance Sector Privatization The entry of private players helps in spreading and deepening the operations in the Indian insurance sector which in turn results in restructuring and revitalizing of public sector companies. Privatisation of the Insurance Sector Worker's Opposition Gaining Momentum Lakhs of insurance employees have been waging struggle over the past two months against the introduction of the Insurance privatisation bill in parliament. On December 1, a country-wide strike was observed. Earlier on November 29, massive rallies and dharnas were staged in Delhi as well as all the state capitals. On October 30th, 2 lakh insurance sector employees staged a nation-wide strike to oppose opening up of the insurance sector to the plunder of private and foreign capital. Earlier a petition on behalf of the 1.5 crore insurance employees had been placed in Parliament. The ruling class is particularly desperate to get this Bill passed because, firstly it would open up a whole new lucrative sector to the Indian and foreign big finance capital. The present size of the Indian insurance and pension funds market is Rs. 40,000 crores, but research studies have predicted that it has a potential of Rs. 70,000 crores. Secondly, the Bill is supposed to signal to capitalists around the world that the Indian bourgeoisie has now installed a "stable" government at the centre and that it will be speeding up the reforms - a demand that was placed as a precondition for any party to...
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...Privatisation of Royal Mail: Will this lead to further efficiency improvements? 1. Background In recent years, the postal industry has changed. We have seen a recent boom in internet shopping, and while once Royal Mails sole purpose was to deliver letters, there is now an increasing emphasis on parcel deliveries. The shift in focus as well as the ever increasing competition in the industry, often from firms serving the 'bulk mail' side of the market such as UK mail and TNT is posing threat to the sustainability of the universal postal industry. It was decided in 2011 under the postal services act that in order to maintain competitive and to preserve the longstanding future of Royal Mail that 90% of the company would be privatised. This was seen as the most appropriate option, as the falling demand from consumers as they switched to their electronic communications came at a time where the government was not willing to add to public spending. In the event of this, responsibility for economic regulation was passed from Postcomm to Ofcom, who designed and implemented a new regulatory framework. Throughout this report, we will look at the potential benefits and detriments of privatisation; this will be applied in order to draw a conclusion as to whether the privatisation of Royal Mail was the most appropriate action. 2. Reasons for Privatisation One of the main reasons why privatisation may lead to greater efficiency than public ownership is that governments may not have exercised...
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...Liberalisation Privatisation Globalisation The organisation of capitalist society is based on economics and naturally precipitates a class structure. The classes achieve their distinction solely on the premise of having or not having economic power. The economic structure of the society in turn depends on what the society produces, for whose consumption, and how it is exchanged. Any change in the modes of production and exchange are reflected directly or indirectly on the social fabric. Both these operations are controlled by the classes that are economically privileged and the interests of the other classes are almost always jeopardised. This logic is true not only in the internal relations of a society but also between societies. Since these relations are determined by an imbalance of power, they exist in a retarded and volatile condition that seeks discharge. Conflict and protest are therefore inevitable in such a structure. It is in these protests from the dispossessed classes that one finds the genesis of all major revolutions and rearrangements of social order. With the advent of capitalism, the lower classes that toiled at the farms or at the furnaces, became 'labour'- not bound to their trades by tradition or command of the feudal lord but they became free contracting agents who could sell their capacity to labour, in the market. This shift did not of course imply any elevation in their conditions. They remained indispensable cogs in the social machinery- only the machinery...
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...International Journal of Advanced System and Social Engineering Research ISSN 2278-6031, Vol 3, Issue 1, 2013, pp18-22 http://www.bipublication.com ADVANTAGES AND DISADVANTAGES OF PRIVATISATION IN INDIA Anant Kousadikar and Trivender Kumar Singh* *Jatan Swaroop PostGraduate College, Kayasthwada,Sikandrabad(U.P.), Distt: Bulandshar [Received-05/12/2012, Published-17/01/2013] ABSTRACT Privatization in generic terms refers to the process of transfer of ownership, can be of both permanent or long term lease in nature, of a once upon a time state-owned or public owned property to individuals or groups that intend to utilize it for private benefits and run the entity with the aim of profit maximization. In other words, it is a route from public or state ownership to private players or a group. From the other point of view, it is a strategy that provides advantages to a few at the price of many. However, this is always subjected to the circumstances involved. In this paper, the aim is to understand the major advantages and disadvantages of privatization in this country. Index Terms: Privatisation, advantages, Public administration. I. INTRODUCTION Privatization is a managerial approach that has attracted the interest of many categories of peopleacademicians, politicians, government employees, players of the private sector, and public on the whole. As per the opinion by the subject experts, privatization can be advantageous in terms of the higher flexibility and scope of innovation...
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...The Privatization of Royal Mail Maastricht University School of Business and Economics Maastricht, 5th April 2014 Wall, Sebastian (SW) ID numbers: I6029483 Course code: Group number: 1 Tutor’s name: Professor Hans van Mierlo Writing Assignment: Final Paper 1 Executive Summary Royal Mail is the largest provider of postal services in the United Kingdom and one of the largest postal service providers in the world. This paper analyzes the recent move of the British Government to privatize the Royal Mail. It looks at various aspects leading up to the privatization and the effect that privatization has had on the Royal mail currently. Royal Mail will also be compared to another firm Deutsche Post in an attempt to see if one of the most successful postal privatizations bares any resemblance to the privatization carried out by the Royal Mail. The...
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...NAME: RAGINI BHAIA ROLL: 19 SEMESTER: 6 COURSE: BACHELOR IN BUSINESS ADMINISTRATION TOPIC: PRIVATISATION IN THE INDIAN HEALTHCARE SECTOR CONTENTS 1. INTRODUCTION 1.1. PRIVATIZATION 1.2 INDIAN HEALTHCARE INDUSTRY 1.2.1 DRIVERS FOR GROWTH OF HEALTHCARE 1.3 PUBLIC HEALTHCARE IN INDIA 1.4 PRIVATE SECTOR IN THE INDIAN HEALTHCARE DELIVERY SYSTEM 1.4.1 GOVERNMENT POLICIES TO SUPPORT THE GROWTH OF PRIVATE SECTOR 1.4.2 FDI IN THE INDIAN HEALTHCARE 1.4.2.1 STATUS AND PROSPECTS FOR FOREIGN INVESTMENTS IN HOSPITALS IN INDIA 1.4.2.2 CONSTRAINTS TO FOREIGN INVESTMENTS IN HOSPITALS IN INDIA 1.4.2.3 FOREIGN PRESENCE IN HOSPITALS IN INDIA 1.4.2.4 SUMMARY OF PROS AND CONS FOR FINANCING SOURCES OF HOSPITALS OBJECTIVES 2. LITERATURE REVIEW 3. ANALYSIS OF THE IMPACT OF PRIVATIZATION IN THE HEALTHCARE SECTOR 3.1 QUALITY AND PRIVATE HEALTHCARE SERVICES 3.2 IMPACT OF FOREIGN INVESTMENTS IN HOSPITALS IN INDIA 3.3 CONSUMER PERCEPTION OF PRIVATE SECTOR 3.4 EMERGING TRENDS IN HOSPITALS IN INDIA: CHALLENGES AND INTERVENTIONS 4. CONCLUSION 5. ACKNOWLEDGEMENT 6...
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...Tree Common ash (Fraxinus excelsior), a broad-leaved tree European larch (Larix decidua), a coniferous tree Lepidodendron, an extinct lycophyte tree In botany, a tree is a plant with an elongated stem, or trunk, supporting leaves or branches. In some usages, the definition of a tree may be narrower, including only woody plants, only plants that are usable as lumber, only plants above a specified height or only perennial species. At its broadest, trees include the taller palms, the tree ferns, bananas and bamboo. A tree typically has many secondary branches supported clear of the ground by the trunk. This trunk typically contains woody tissue for strength, and vascular tissue to carry materials from one part of the tree to another. For most trees it is surrounded by a layer of bark which serves as a protective barrier. Below the ground, the roots branch and spread out widely; they serve to anchor the tree and extract moisture and nutrients from the soil. Above ground, the branches divide into smaller branches and shoots. The shoots typically bear leaves, which capture light energy and convert it into chemical energy by photosynthesis, providing the food needed by the tree for its growth and development. Flowers and fruit may also be present, but some trees such as conifers instead have pollen cones and seed cones, and others such as tree ferns produce spores instead. Trees tend to be long-lived,[1] some reaching several thousand years old. The tallest known specimen on Earth...
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...Privatisation is where a previously public owned firm is sold privately usually to generate a large capital sum or to reduce the burden on the public sector. Privatisation refers to the changing of ownership from a state-owned to a privately owned entity. It is usually done three ways which usually are the sale of assets, contracting out and deregulation. Therefore by privatising the MHPA, it means that the ownership of the enterprise would change to a privately owned firm from a state owned firm and therefore this would bring about a large amount of potential changes in the way that the firm is run and operates. Using the data as well as my own economic knowledge, I am against the privatisation of the MHPA. One of the reasons why I take this viewpoint is due to the fact that there are large negative externalities when concerning the MHPA as it involves in a sector which pollutes heavily. If the MHPA was a private firm, it would therefore take the standpoint of being profit-maximising producing at MPC=MPB=MSB which would therefore when taking into account the externalities be considered as overproduction. Due to this overproduction there would obviously be an increase in the resulting pollution and this would be considered as inefficiency, which is shown by the dead-weight loss (ABC) in graph 1. However, if the firm was nationalised and therefore not profit maximising, it would be producing at Q1 which would result in no or less overproduction which would also result in increased...
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...Pros and Cons of Liberalisation , Privatisation and Globalisation (LPG) , LPG in Developed and Developing Countries LIBERALISATION The main aim of liberalisation was to dismantle the excessive regulatory framework which acted as a shackle on freedom of enterprise. Over the years, the country had developed a system of “license-permit raj.” The aim of the new economic policy was to save the entrepreneurs from unnecessary Harassment of seeking permission from the Babudom (the bureaucracy of the country) to start an undertaking. Similarly, the big business houses were unable to start new enterprises because the Monopolies and Restrictive Trade Practices (MRTP) Act had prescribed a ceiling on asset ownership to the extent of Rs. 90 crores. In case a business house had assets of more than Rs.90 crores, its application after scrutiny by the MRTP Commission was rejected. It was believed that on account of the rise in prices this limit had become outdated and needed a review. The major purpose of liberalisation was to free the large private corporate sector form bureaucratic controls. It, therefore, started dismantling the regime of industrial licensing and controls. On April 14, 1993, the Cabinet Committee on Economic Affairs decided to remove three more items form the list of 18 industries reserved for compulsory licencing. The three items were: motor cars, white goods (which include refrigerators, washing machines, air-conditioners, microwave ovens etc.) and raw hides...
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...Introduction This analysis of the LBO of Amtek Engineering Limited (“Amtek”) in 2007 is noteworthy, primarily because it is one of the more recent example in Singapore of a leverage buyout of a public company involving private equity players , and it showcases a example of how private equity firms typically restructure and streamline the acquired company, subsequently executing their exit strategy via an initial public offering. In this paper, I will first provide a background on the leverage buyout and privatization of Amtek in 2007. This will be followed by an elaboration on the strategic, operational and organizational restructuring measures implemented by the new owners. Lastly, we shall examine why the exit strategy through an IPO in 2010 was not well received by retail and institutional investors, resulting in a pullback of the targeted IPO proceeds and a languishing first-day stock price. Background Amtek was founded in Singapore as Metaltek Engineering Private Limited in 1970. With a core business in precision metals engineering and metal stamping, Amtek was formed during Singapore’s rapid industrialisation period in the 1970s. In 1987, it was listed on the Stock Exchange of Singapore. As an engineering company that did not have an exciting business or product, Amtek was profitable but primarily stayed off investors’ radar for many years. On 22 May 2007, Metcomp Holdings, a private equity partnership between Britain's CVC Capital Partners Asia Pacific, Standard...
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