MBA: 870

MANAGEMENT THEORY & PRACTICE

Group 3

Sheila Nasieku
Eliud Nzola
Jane Mungai
PeterMwaniki
Caroline Wahome

THE ASSIGNMENT
EMERGING ISSUES IN MANAGEMENT

PRIVATIZATION

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Privatization
Definition
A very broad term--but most simply, privatization is the transfer of assets or service delivery
from the government to the private sector. Privatization runs a very broad range, sometimes
leaving very little government involvement, and other times creating partnerships between
government and private service providers where government is still the dominant player.

Privatization may also be described as the incidence or process of transferring ownership of a

business, enterprise, agency or public service from the public sector (government) to the
private sector (business). In a broader sense, privatization refers to transfer of any
government function to the private sector including governmental functions like revenue
collection and law enforcement.

The term "Privatization" has been used to describe two unrelated transactions. The first is a
buyout, by the majority owner, of all shares of a public corporation or holding company's
stock, privatizing a publicly traded stock. The second is a demutualization of a mutual
organization or cooperative to form a joint stock company.

There is constant increase in the privatization of the economy the government is taking many
steps to privatize the government owned industries which are providing least efficiency. The
privatization is carried through the advertisement in the news by which the companies and
individuals are asked to come to the auction ceremony of any property in which many buyers
come together and they quote their prices. The higher the price the person can win to take the
property or ownership. The privatization is the only key to gain the economic efficiency and
enhance the productivity of the country.

It started from the British when the government started to sold his owned properties to private
sector in 1980. By doing privatization the government can attract large number of foreign
investors by which the country get the foreign reserves and the there are chances to increase
the employment opportunities in the country by utilizing the government funds the
government can start the large infrastructure development projects by which the government
can provide better facilities to the government sector. It took practice after started from
British to other countries of the world.

• Merely defining "privatization" is difficult. In its purest form, the term refers to the
shifting of the production of a good or the provision of a service from the government
to the private sector, often by selling government-owned assets.

• Most definitions of privatization, though, are more expansive, covering virtually any
action that involves exposing the operations of government to the pressures of the
commercial marketplace.

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 • The broader definition of privatization also includes a wide range of public-private
partnerships.

Types of privatization

There are three main methods of privatization:

• Share issue privatization (SIP) - selling shares on the stock market

• Asset sale privatization - selling the entire firms or part of it to a strategic investor,
usually by auction or using Treuhand model.

(The Treuhand (Treuhandanstalt or Treuhand agency) was the agency that privatized the East
German enterprises owned as public property (common property). Created by
the Volkskammer on June 17, 1990, it oversaw the restructuring and selling of about 8,500 firms with
initially over 4 million employees. At that time it was the world's largest industrial enterprise)

• Voucher privatization - shares of ownership are distributed to all citizens, usually for
free or at a very low price.

Share issue privatization is the most common type of privatization.

Share issue can broaden and deepen domestic capital markets, boosting liquidity and
potentially economic growth, but if the capital markets are insufficiently developed it may be
difficult to find enough buyers, and transaction costs (e.g. under pricing required) may be
higher. For this reason, many governments elect for listings in the more developed and liquid
markets. Euronext, and the London, New York and Hong Kong Stock Exchanges are popular
because they are highly developed and sophisticated.

As a result of higher political and currency risk deterring foreign investors, asset sales are
more common in developing countries.

Voucher privatization has mainly been used in the transition economies of Central and
Eastern Europe, such as Russia, Poland, the Czech Republic, and Slovakia.

A very substantial benefit to share or asset sale privatizations is that bidders compete to offer
the state the highest price, creating revenues for the state to redistribute in addition to new tax
revenue. Voucher privatizations, on the other hand, would be a genuine return of the assets
into the hands of the general population, and create a real sense of participation and inclusion.
Vouchers, like all other private property, could then be sold on if preferred by what
companies are offering.

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TECHNIQUES OF PRIVATIZATION

A variety of alternative service delivery techniques can be employed to maximize efficiency

and increase service quality. Some methods will be more appropriate than others depending
on the service. In searching for ways of cutting costs and increasing delivery, consider using
a combination of these techniques:

• Contracting Out (also called "outsourcing"). The government competitively

contracts with a private organization, for-profit or non-profit, to provide a service or
part of a service.

• Management Contracts. The operation of a facility is contracted out to a private

company. Facilities where the management is frequently contracted out include
airports, wastewater plants, arenas and convention centers.

• Public-Private Competition (also called "managed competition," or "market

testing"). When public services are opened up to competition, in-house public
organizations are allowed to participate in the bidding process.

• Franchise. A private firm is given the exclusive right to provide a service within a
certain geographical area.

• Internal Markets. Departments are allowed to purchase support services such as

printing, maintenance, computer repair and training from in-house providers or
outside suppliers. In-house providers of support services are required to operate as
independent business units competing against outside contractors for departments’
business. Under such a system, market forces are brought to bear within an
organization. Internal customers can reject the offerings of internal service providers
if they don’t like their quality or if they cost too much.

• Vouchers. Government pays for the service; however, individuals are given
redeemable certificates to purchase the service on the open market. These subsidize
the consumer of the service, but services are provided by the private sector. In
addition to providing greater freedom of choice, vouchers bring consumer pressure to
bear, creating incentives for consumers to shop around for services and for service
providers to supply high-quality, low-cost services.

• Commercialization (also referred to as "service shedding"). Government stops

providing a service and lets the private sector assume the function.

• Self-Help (also referred to as "transfer to non-profit organization"). Community

groups and neighborhood organizations take over a service or government asset such
as a local park. The new providers of the service also are directly benefiting from the
service. Governments increasingly are discovering that by turning some non-core
services—such as zoos, museums, fairs, remote parks and some recreational programs
—over to non-profit organizations, they are able to ensure that these institutions don’t
drain the budget.

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 • Volunteers. Volunteers are used to provide all or part of a government service.
Volunteer activities are conducted through a government volunteer program or
through a non-profit organization.

• Corporatization. Government organizations are reorganized along business lines.

Typically they are required to pay taxes, raise capital on the market (with no
government backing—explicit or implicit), and operate according to commercial
principles. Government corporations focus on maximizing profits and achieving a
favorable return on investment. They are freed from government procurement,
personnel and budget systems.

• Asset Sale or Long-Term Lease. Government sells or enters into long-term leases
for assets such as airports, gas utilities or real estate to private firms, thus turning
physical capital into financial capital. In a sale-leaseback arrangement, government
sells the asset to a private sector entity and then leases it back. Another asset sale
technique is the employee buyout. Existing public managers and employees take the
public unit private, typically purchasing the company through an Employee Stock
Ownership Plan (ESOP).

• Private Infrastructure Development and Operation. The private sector builds,

finances and operates public infrastructure such as roads and airports, recovering costs
through user charges. Several techniques commonly are used for privately building
and operating infrastructure;

o With Build-Operate-Transfer (BOT) arrangements, the private sector

designs, finances, builds, and operates the facility over the life of the contract.
At the end of this period, ownership reverts to the government.

o A variation of this is the Build-Transfer-Operate (BTO) model, under which

title transfers to the government at the time construction is completed.

o Finally, with Build-Own-Operate (BOO) arrangements, the private sector

retains permanent ownership and operates the facility on contract.

Why privatize?
Ownership is a significant determinant of enterprise performance. In both developed and
developing countries, good SOE performance has been very difficult to bring about--and
even harder to sustain. Governments facing financial crisis often try to improve performance
by bringing in new and dynamic managers, and paying them incentive salaries. And they
grant managers autonomy to set prices and hire and fire--and agree to overdue tariff increases
and payment of past due bills. These measures often have a positive effect. But as the crisis
dissipates, so does political resolve.

Political interference, a common and deadly disease of SOEs, tends to re-emerge--and

painfully achieved SOE reforms tend to backslide. SOEs thought to be well on the road to
recovery have either stopped improving performance or suffered deterioration. In Korea,
where reform short of ownership change ended losses in a group of SOEs for three years in
the mid-1980s, large deficits have since reappeared. In New Zealand and Japan, SOE reforms
began to bite only when done in conjunction with privatization.

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Recognition that SOE reforms are limited and unsustainable, coupled with the fiscal burden
of subsidizing loss-makers, has led financially hard-pressed governments to opt for
privatization.

Arguments for and against privatization

Pro-privatization

Proponents of privatization believe that private market factors can more efficiently deliver
many goods or service than government due to free market competition. In general, it is
argued that over time this will lead to lower prices, improved quality, more choices, less
corruption, less red tape, and quicker delivery. Many proponents do not argue that everything
should be privatised. According to them, market failures and natural monopolies could be
problematic. However, some Austrian school economists and anarcho-capitalists would
prefer that everything be privatised, including the state itself.

The basic economic argument given for privatisation is that governments have few incentives
to ensure that the enterprises they own are well run. One problem is the lack of comparison in
state monopolies. It is difficult to know if an enterprise is efficient or not without competitors
to compare against. Another is that the central government administration, and the voters who
elect them, have difficulty evaluating the efficiency of numerous and very different
enterprises. A private owner, often specializing and gaining great knowledge about a certain
industrial sector, can evaluate and then reward or punish the management in much fewer
enterprises much more efficiently. Also, governments can raise money by taxation or simply
printing money should revenues be insufficient, unlike a private owner.

If there are both private and state owned enterprises competing against each other, then the
state owned may borrow money more cheaply from the debt markets than private enterprises,
since the state owned enterprises are ultimately backed by the taxation and printing press
power of the state, gaining an unfair advantage.

Privatising a non-profitable company which was state-owned may force the company to raise
prices in order to become profitable. However, this would remove the need for the state to
provide tax money in order to cover the losses.

• Performance. State-run industries tend to be bureaucratic. A political government

may only be motivated to improve a function when its poor performance becomes
politically sensitive, and such an improvement can be reversed easily by another
regime.
• Increased efficiency. Private companies and firms have a greater incentive to
produce more goods and services for the sake of reaching a customer base and hence
increasing profits. A state-owned firm would not be as productive due to the lack of
financing allocated by the entire government's budget that must consider other areas
of the economy.
• Specialisation A private business has the ability to focus all relevant human and
financial resources onto specific functions. A state-owned firm does not have the
necessary resources to specialise its goods and services as a result of the general
products provided to the greatest number of people in the population.

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• Improvements. Conversely, the government may put off improvements due to
political sensitivity and special interests — even in cases of companies that are run
well and better serve their customers' needs.
• Corruption. A monopolized function is prone to corruption; decisions are made
primarily for political reasons, personal gain of the decision-maker (i.e. "graft"),
rather than economic ones. Corruption (or principal-agent issues) during the
privatisation process - however - can result in significant underpricing of the asset.
This allows for more immediate and efficient corrupt transfer of value - not just from
ongoing cash flow, but from the entire lifetime of the asset stream. Often such
transfers are difficult to reverse.

• Accountability. Managers of privately owned companies are accountable to their

owners/shareholders and to the consumer, and can only exist and thrive where needs
are met. Managers of publicly owned companies are required to be more accountable
to the broader community and to political "stakeholders". This can reduce their ability
to directly and specifically serve the needs of their customers, and can bias investment
decisions away from otherwise profitable areas.
• Civil-liberty concerns. A company controlled by the state may have access to
information or assets which may be used against dissidents or any individuals who
disagree with their policies.
• Goals. A political government tends to run an industry or company for political goals
rather than economic ones.
• Capital. Privately held companies can sometimes more easily raise investment capital
in the financial markets when such local markets exist and are suitably liquid. While
interest rates for private companies are often higher than for government debt, this can
serve as a useful constraint to promote efficient investments by private companies,
instead of cross-subsidizing them with the overall credit-risk of the country.
Investment decisions are then governed by market interest rates. State-owned
industries have to compete with demands from other government departments and
special interests. In either case, for smaller markets, political risk may add
substantially to the cost of capital.

• Security. Governments have had the tendency to "bail out" poorly run businesses,
often due to the sensitivity of job losses, when economically, it may be better to let
the business fold.
• Lack of market discipline. Poorly managed state companies are insulated from the
same discipline as private companies, which could go bankrupt, have their
management removed, or be taken over by competitors. Private companies are also
able to take greater risks and then seek bankruptcy protection against creditors if those
risks turn sour.
• Natural monopolies. The existence of natural monopolies does not mean that these
sectors must be state owned. Governments can enact or are armed with anti-trust
legislation and bodies to deal with anti-competitive behavior of all companies public
or private.
• Concentration of wealth. Ownership of and profits from successful enterprises tend
to be dispersed and diversified -particularly in voucher privatisation. The availability
of more investment vehicles stimulates capital markets and promotes liquidity and job
creation.
• Political influence. Nationalized industries are prone to interference from politicians
for political or populist reasons. Examples include making an industry buy supplies

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 from local producers (when that may be more expensive than buying from abroad),
forcing an industry to freeze its prices/fares to satisfy the electorate or control
inflation, increasing its staffing to reduce unemployment, or moving its operations to
marginal constituencies.
• Profits. Corporations exist to generate profits for their shareholders. Private
companies make a profit by enticing consumers to buy their products in preference to
their competitors' (or by increasing primary demand for their products, or by reducing
costs). Private corporations typically profit more if they serve the needs of their
clients well. Corporations of different sizes may target different market niches in
order to focus on marginal groups and satisfy their demand. A company with good
corporate governance will therefore be incentivized to meet the needs of its customers
efficiently.

Anti-privatization

Opponents of privatisation dispute the claims concerning the alleged lack of incentive for
governments to ensure that the enterprises they own are well run, on the basis of the idea that
governments are proxy owners answerable to the people. It is argued that a government
which runs nationalized enterprises poorly will lose public support and votes, while a
government which runs those enterprises well will gain public support and votes. Thus,
democratic governments do have an incentive to maximize efficiency in nationalized
companies, due to the pressure of future elections.

Opponents of certain privatisations believe certain parts of the social terrain should remain
closed to market forces in order to protect them from the unpredictability and ruthlessness of
the market (such as private prisons, basic health care, and basic education). Another view is
that some of the utilities which government provides benefit society at large and are indirect
and difficult to measure or unable to produce a profit, such as defense. Still another is that
natural monopolies are by definition not subject to competition and better administrated by
the state.

The controlling ethical issue in the anti-privatisation perspective is the need for responsible
stewardship of social support missions. Market interactions are all guided by self-interest, and
successful actors in a healthy market must be committed to charging the maximum price that
the market will bear. Privatisation opponents believe that this model is not compatible with
government missions for social support, whose primary aim is delivering affordability and
quality of service to society.

Many privatisation opponents also warn against the practice's inherent tendency toward
corruption. As many areas which the government could provide are essentially profitless, the
only way private companies could, to any degree, operate them would be through contracts or
block payments. In these cases, the private firm's performance in a particular project would
be removed from their performance, and embezzlement and dangerous cost cutting measures
might be taken to maximize profits.

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Furthermore, large corporations can pay public relations professionals to convince decision-
makers that privitazation is a sensible idea, whether or not this is actually the case.
Corporations typically have far more resources for expert testimony, advertisements,
conferences and other propaganda efforts than anti-privatisation advocates. Of course, this
fact has no bearing on the merits of privatisation itself.

Some would also point out that privatising certain functions of government might hamper
coordination, and charge firms with specialized and limited capabilities to perform functions
which they are not suited for. In rebuilding a war torn nation's infrastructure, for example, a
private firm would, in order to provide security, either have to hire security, which would be
both necessarily limited and complicate their functions, or coordinate with government,
which, due to a lack of command structure shared between firm and government, might be
difficult. A government agency, on the other hand, would have the entire military of a nation
to draw upon for security, whose chain of command is clearly defined. Opponents would say
that this is a false assertion: numerous books refer to poor organization between government
departments (for example the Hurricane Katrina incident).

Furthermore, opponents of privatization argue that it is undesirable to transfer state-owned

assets into private hands for the following reasons:

• Performance. A democratically elected government is accountable to the people

through a legislature, Congress or Parliament, and is motivated to safeguarding the
assets of the nation. The profit motive may be subordinated to social objectives.
• Improvements. the government is motivated to performance improvements as well
run businesses contribute to the State's revenues.
• Corruption. Government ministers and civil servants are bound to uphold the highest
ethical standards, and standards of probity are guaranteed through codes of conduct
and declarations of interest. However, the selling process could lack transparency,
allowing the purchaser and civil servants controlling the sale to gain personally.
• Accountability. The public does not have any control or oversight of private
companies.
• Civil-liberty concerns. A democratically elected government is accountable to the
people through a parliament, and can intervene when civil liberties are threatened.
• Goals. The government may seek to use state companies as instruments to further
social goals for the benefit of the nation as a whole.
• Capital. Governments can raise money in the financial markets most cheaply to re-
lend to state-owned enterprises.
• Lack of market discipline. Governments have chosen to keep certain
companies/industries under public ownership because of their strategic importance or
sensitive nature.
• Cuts in essential services. If a government-owned company providing an essential
service (such as the water supply) to all citizens is privatised, its new owner(s) could
lead to the abandoning of the social obligation to those who are less able to pay, or to
regions where this service is unprofitable.
• Natural monopolies. Privatisation will not result in true competition if a natural
monopoly exists.
• Concentration of wealth. Profits from successful enterprises end up in private, often
foreign, hands instead of being available for the common good.
• Political influence. Governments may more easily exert pressure on state-owned
firms to help implementing government policy.

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 • Downsizing. Private companies often face a conflict between profitability and service
levels, and could over-react to short-term events. A state-owned company might have
a longer-term view, and thus be less likely to cut back on maintenance or staff costs,
training etc, to stem short term losses. Many private companies have downsized while
making record profits.
• Profit. Private companies do not have any goal other than to maximize profits. A
private company will serve the needs of those who are most willing (and able) to pay,
as opposed to the needs of the majority, and are thus anti-democratic. The more
necessary a good is, the lower the price elasticity of demand, as people will attempt to
buy it no matter the price. In the case of price elasticity of demand is zero (perfectly
unelastic good), demand part of supply and demand theories does not work.
• Privatisation and Poverty. It is acknowledged by many studies that there are
winners and losers with privatisation. The number of losers —which may add up to
the size and severity of poverty—can be unexpectedly large if the method and process
of privatisation and how it is implemented are seriously flawed (e.g. lack of
transparency leading to state-owned assets being appropriated at minuscule amounts
by those with political connections, absence of regulatory institutions leading to
transfer of monopoly rents from public to private sector, improper design and
inadequate control of the privatisation process leading to asset stripping.[6]
• Job Loss. Due to the additional financial burden placed on privatized companies to
succeed without any government help, unlike the public companies, jobs could be lost
to keep more money in the company.

Intermediate Views

Others don't dispute that well run for-profit entities with sound corporate governance may be
considerably more efficient than an inefficient governmental bureaucracy or NGO, however
many implementations of privatization can - in practice - lead to the firesale of public assets,
and/or to inefficient or corrupt - for profit management.

Developed / Low corruption economies

It is fairly easy for a top executive to reduce the perceived value of an asset - due to
information asymmetry. The executive can accelerate accounting of expected expenses, delay
accounting of expected revenue, engage in off balance sheet transactions to make the
company's profitability appear temporarily poorer, or simply promote and report severely
conservative (eg. pessimistic) estimates of future earnings. Such seemingly adverse earnings
news will be likely to (at least temporarily) reduce sale price. (This is again due to
information asymmetries since it is more common for top executives to do everything they
can to window dress their earnings forecasts). There are typically very few legal risks to
being 'too conservative' in one's accounting and earnings estimates.

When the entity gets taken private - at a dramatically lower price - the new private owner
gains a windfall from the former top executive's actions to surreptitiously reduce the sales

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price. This can represent 10s of billions of dollars (questionably) transferred from previous
owners (the public) to the takeover artist. The former top executive is then rewarded with a
golden handshake for presiding over the firesale that can sometimes be in the 10s or 100s of
millions of dollars for one or two years of work. (This is nevertheless an excellent bargain for
the takeover artist, who will tend to benefit from developing a reputation of being very
generous to parting top executives).

When a publicly held asset, mutual or non-profit organization undergoes privatization, Top
executives often reap tremendous monetary benefits. The executives can facilitate the process
by making the entity appear to be in financial crisis - this reduces the sale price (to the profit
of the purchaser), and makes non-profits and governments more likely to sell.

Ironically, it can also contribute to a public perception that private entities are more
efficiently run reinforcing the political will to sell of public assets. Again, due to asymmetric
information, policy makers and the general public see a government owned firm that was a
financial 'disaster' - miraculously turned around by the private sector (and typically resold)
within a few years.

Underdeveloped &/or High corruption economies

In a society with substantial corruption, privatization allows the government currently in

power and its backers to siphon a large portion of the entire net present value of state assets
away from the public and into the accounts of their favored power brokers. Without
privatization, corrupt officials would have to slowly harvest their corrupt earnings over time.
As such, efficient privatization depends on their being a very low of current corruption
among the current government officials since it allows for far more 'efficient' extraction of
corrupt rents.

Of course, corrupt governments can also extract corrupt rents quite efficiently in other ways -
particularly by borrowing extensively to engage in spending on overly favorable contracts
with their backers (or on tax shelters, subsidies or other give-aways). Generations of
subsequent taxpayers are then left with paying back the debt incurred for corrupt transfers
made decades previously. Naturally, this may lead to the sale of public assets....

In the end, the public is left with a government that taxes them heavily, and gives them
nothing in return. Debt repayment is enforced by international agreements and agencies such
as the IMF. Infrastructure and upkeep is sacrificed - leading to a further decay in the
economic efficiency of the country over time.

Outcomes

Literature reviews find that in competitive industries with well-informed consumers,

privatisation consistently improves efficiency. Such efficiency gains mean a one-off increase
in GDP, but through improved incentives to innovate and reduce costs also tend to raise the
rate of economic growth. The type of industries to which this generally applies includes
manufacturing and retailing. Although typically there are social costs associated with these
efficiency gains, many economists argue that these can be dealt with by appropriate
government support through redistribution and perhaps retraining.

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In sectors that are natural monopolies or public services, the results of privatization are much
more mixed, as a private monopoly behaves much the same as a public one in liberal
economic theory. In general, if the performance of an existing public sector operation is
sufficiently bad, privatisation (or threat thereof) has been known to improve matters. Changes
may include, inter alia, the imposition of related reforms such as greater transparency and
accountability of management, improved internal controls, regulatory systems, and better
financing, rather than privatisation itself.

Regarding political corruption, it is a controversial issue whether the size of the public sector
per se results in corruption. The Nordic countries have low corruption but large public
sectors. However, these countries score high on the Ease of Doing Business Index, due to
good and often simple regulations, and for political rights and civil liberties, showing high
government accountability and transparency. One should also notice the successful,
corruption-free privatizations and restructuring of government enterprises in the Nordic
countries. For example, dismantling telecommunications monopolies have resulted in several
new players entering the market and intense competition with price and service.

Also regarding corruption, the sales themselves give a large opportunity for grand corruption.
Privatizations in Russia and Latin America were accompanied by large-scale corruption
during the sale of the state-owned companies. Those with political connections unfairly
gained large wealth, which has discredited privatization in these regions. While media have
reported widely the grand corruption that accompanied the sales, studies have argued that in
addition to increased operating efficiency, daily petty corruption is, or would be, larger
without privatization, and that corruption is more prevalent in non-privatized sectors.
Furthermore, there is evidence to suggest that extralegal and unofficial activities are more
prevalent in countries that privatized less.

Alternatives to total privatization

Public Utility

The enterprise can remain as a public utility.

Non-Profit

The enterprise could be managed by a private non-profit organization.

Municipalization

Transferring control to municipal government

Outsourcing or Sub-contracting

It is possible that national services may sub-contract or out-source functions to private

enterprises. A notable example of this is in the United Kingdom, where many municipalities
have contracted out their garbage collection or administration of parking fines to private
companies. In addition, the British government has involved the private sector more in the
workings of the National Health Service principally through outsourcing the construction and

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operation of new hospitals to private companies. There are also moves to refer patients to
private surgeries to ease the load on existing NHS human resources, and covering the cost of
this.

Partial ownership

An enterprise may be privatised, with a number of shares in the company being retained by
the state. This is a particularly notable phenomenon in France, where the state often retains a
"blocking stake" in private industries. In Germany, the state privatised Deutsche Telekom in
small tranches, and still retains about a third of the company. As of 2005, the state of North
Rhine-Westphalia is also planning to buy shares in the energy company E.ON in what is
claimed to be an attempt to control spiraling costs.

Whilst partial privatization could be an alternative, it is more often a stepping stone to full
privatization. It can offer the business a smoother transition period during which it can
gradually adjust to market competition. Some state-owned companies are so large that there
is the risk of sucking liquidity from the rest of the market, even in the most liquid
marketplaces, and thus must be sold off bit by bit. The first tranche of a multi-step
privatization would also in the first instance establish a valuation for the enterprise to mitigate
complaints of under-pricing.

In some instances of partial privatization of contracted services, provision of some portion(s)

of the state-owned service are provided by private-sector contactors, but the government
retains the capacity to self-operate at contract intervals, if it so chooses. An example of partial
privatization would be some forms of school bus service contracting, such as arrangements
where equipment and other resources purchased with government capital funds and/o those
already owned by a governmental entity are used by the contractor for a period of time in
providing services, but ownership is retained by the governmental unit. This form of partial
privatization eases concerns that once an operation is contracted, the government may be
unable to obtain sufficient competitive bids, and be subjected to terms less desirable than the
prior operation under state-ownership. Under that scenario, a reverse privatisation would be
more feasible for the government. (see section below)

Notable privatizations

The largest privatization in history was Japan Post. It was the nation's largest employer and
one third of all Japanese government employees worked for Japan Post. Japan Post was often
said to be the largest holder of personal savings in the world.

The Prime Minister Junichiro Koizumi wanted to privatize it because it was thought to be an
inefficient and a source for corruption. In September 2003, Koizumi's cabinet proposed
splitting Japan Post into four separate companies: a bank, an insurance company, a postal
service company, and a fourth company to handle the post offices as retail storefronts of the
other three.

After privatization was rejected by upper house, Koizumi scheduled nationwide elections to
be held on September 11, 2005. He declared the election to be a referendum on postal
privatization. Koizumi subsequently won this election, gaining the necessary supermajority
and a mandate for reform, and in October 2005, the bill was passed to privatize Japan Post in
2007.

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Nippon Telegraph and Telephone's privatization in 1987 was the largest share offering in
financial history at the time. 15 of the world's 20 largest public share offerings have been
privatizations of telecoms.

The United Kingdom's largest public share offerings were privatisations of British Telecom
and British Gas. The largest public share offering in France was France Telecom.
Privatisation in Europe has led to genuine competition: the former state-owned enterprises
lost their monopolies due to legislation and technological change, competitors entered the
market, and prices for broadband access and telephone calls fell dramatically.

PRIVATIZATION IN KENYA

History of Privatization

After Kenya’s independence in 1963, the establishment of the parastatals was driven by a
national desire to:

• Accelerate economic social development.

• Redress regional economic imbalances.
• Increase Kenyan Citizen’s participation in the economy.
• Promote indigenous entrepreneurship.
• Promote foreign investments (through joint ventures).

This desire was expressed in the Sessional Paper No. 10 of 1965 on African Socialism and its
application to planning in Kenya.

Review of the Public Enterprises Performance

A comprehensive review of the Public Enterprises Performance was carried out in 1979 (the
Report on the Review of Statutory Boards) and 1982 (the Report of the Working Party on
Government Expenditures).

The Report on Review of Statutory Boards pointed out that: -

(i) The growth in the parastatal sector had not been accompanied by development of efficient
systems to ensure that the sector plays its role in an efficient manner.

(ii) There was clear evidence of prolonged inefficiency, financial mismanagement, waste and
malpractices in many parastatals.
(iii) Government investments had largely been at the initiative of private promoters with
government being brought in either as an indispensable partner or to undertake rescue
measures.
(iv) Many of the parastatals had moved away from their primary functions, especially the
regulatory boards most of which had translated their regulatory role into executive one,
resulting in waste and confusion.
(v) There was danger of over-politicizing production and distribution through establishment
of too many parastatals.

14
The Report on the Working Party on Government Expenditures concluded that productivity
of state corporations was quite low while at the same time they continued to absorb an
excessive portion of the budget, becoming a principal cause of long-term fiscal problem. The
report observed that: -

(i) Nationalization had remained merely presentational through government ownership;

(ii) State corporations’ operations had become inefficient and unprofitable, partly due to
multiplicity of objectives;
(iii) existence of parastatals in commercial activities had stifled private sector initiatives; and

(iv) many of the joint ventures had failed, requiring the Government to shoulder major
financial burden.

The Report on the Working Party on Government Expenditures concluded that some of the
resources diverted to the government to finance the state corporations’ activities could have
contributed more to national development if these state corporations were left in the private
sector. The report recommended that:-

(i) The government should act as a creator of favourable setting within which people can
develop themselves and the economy
(ii) The government should divest from its investments in commercial and industrial
enterprises to transfer active participation to more Kenyans through participation in
shareholding
(iii) The government should reduce exposure to risk in areas in which the Private Sector can
assume risk without government intervention
(iv) The government should dismantle some of the existing administrative hurdles which
discourage private sector initiative and provide needless opportunities for corruption

(v) The government should reorganize legal and institutional framework regarding
monitoring and supervision of parastatals.

Following the two reviews a number of measures were put in place. One of the measures was
the enactment of the State Corporations Act. However, although this was a major attempt to
streamline the management of the state corporations, the performance of most of the
corporations continued to deteriorate. One reason is the continued reliance on limited public
sector financing. The state corporations continued relying on public sector financing which
was not adequate to meet all the sector’s needs. They continued to be financed from loans
borrowed by the government and/or channeled through them as government equity; loans
borrowed by the enterprises on government guarantees which in most cases ended up being
repaid by the Treasury when the corporations defaulted; funds provided directly by the
Treasury as grants or equity; or through internally generated funds. The internally generated
funds were, however, inadequate due to huge debt burdens, tariffs that were below cost
recovery levels, over employment, which caused most of the revenue to be used in payment
of salaries, non-viable ventures which siphoned away resources from the enterprises,
corruption and mismanagement in general. In addition most of the parastatals were under
capitalization from the time of incorporation as they were mainly financed from loans
without due regard to the establishment of a strong financial base. Most of them also
continued to spread their resources thinly due to multiplicity of objectives and poor
accountability.

15
In July 1992, through the issuance of the Policy Paper on Public Enterprise Reform and
Privatization, the Government outlined the scope of the Public Sector Reform Programme the
institutional framework and the guidelines and procedures for privatizing Public Enterprises
(PEs). The Policy Paper identified 240 commercial PEs with public sector equity
participation and classified them into two categories:

(i) 207 Non strategic commercial PEs which were to be privatized and

(ii) 33 Strategic Commercial PEs which were to be re-structured and retained under public
sector control.

By the end of the first phase of the privatization programme in 2002, most of the non-
strategic commercial enterprises had either been fully or partially privatized.

At that time, the direction of thinking regarding restructuring and retention of a number of
strategic corporations under Government operation and control had also changed due to:-

• Inadequacy of public resources to finance the requisite investment in infrastructure

facilities;
• The need to arrest continued deterioration in infrastructure services;
• Lesson from other countries which had succeeded in improving their infrastructure services
through Public Private Partnerships; and

• Restructuring which resulted in separation of commercial activities from regulatory

functions, making it possible to privatize commercial activities while ensuring Government
continued presence in the privatized sectors through establishment of strong legal and
institutional regulatory frameworks.

Although numerous enterprises were privatized during the first phase, the impact on the
economy was limited because;

(i) Most of the enterprises privatized under this Phase were relatively small and self-
sufficient,
(ii) Most of the large companies were considered strategic and therefore not privatized, and

(iii) The programme had institutional and process weaknesses arising from failure to entrench
the procedures and institutional framework in law.

As a result, the Parastatal Reform Programme Committee (PRPC) eventually became

dormant while its secretariat (The Executive Secretariat and Technical Unit (ESTU)),which
was the administrative organ, was reduced to a skeleton staff following closure of the World
Bank Credit under which it was funded. Lack of clearly defined processes and an effective
communications strategy also exposed the Programme to accusation of corruption. There was
also limited participation by individual Kenyans in most of the transactions due to the
transaction methods applied.

Under the Economic Recovery Strategy for Wealth and Employment Creation (ERSWEC)
2003-2007, the Government implemented a number of key privatization transactions. These
included the Kenya Electricity Generating Company (KenGen) Initial Public Offer (IPO), the
concessioning of the Kenya Railways operations, Mumias Sugar Company Second Offer,

16
Kenya Reinsurance Corporation IPO, Sale of 51% Telkom Kenya shareholding to a strategic
partner and the recently completed Safaricom IPO. Through these transactions, the country
mobilized over Kshs.80 billion used to support the country's recovery and overall
development agenda.

Following expiry of the Economic Recovery Strategy for Wealth and Employment Creation
(ERSWEC) 2003-2007, Kenya has embarked on implementation of a long term strategy,
Vision 2030. On basis of Vision 2030 and its First Medium Term plan for the period 2008 -
2020 the Government is focusing on four priority areas namely:

• Restoring the economy to a higher broad-based long term growth path with expanded
opportunities for all Kenyans;
• Creating employment opportunities for the youth for a more stable and
cohesive society;
• Reducing poverty and inequality through accelerated regional development; and

• Deepening human capital development efforts to increase productivity and prosperity.

To support the pursuit of these goals, the privatization seeks to improve the efficiency and
competitiveness of Kenya's productive resources by subjecting more of Kenya's production to
market forces, mobilizing investment resources for rehabilitation, expanding and
modernizing key infrastructure facilities, developing the capital markets and supporting the
budget through privatization proceeds and increased taxes. Government is also expected to
earn increased dividends from its remaining shareholding as a result of improved
performance following enterprise privatization.

Privatization commission of Kenya

PRIVATIZATION PROCESS

For each privatization included in the privatization programme the Commission shall make a
specific proposal for privatization. The Minister shall present a report on the privatization
proposals approved by the Cabinet to the relevant committee of Parliament. Without limiting
what else may be included, a privatization proposal shall set out the following –

(a) For the assets or operations being proposed for privatization

(i) the purpose of the establishment or existence of the assets or operations;

(ii) the extent to which the purpose has been met by the assets or operations including
any inadequacies in meeting that purpose;
(iii) the rights or other entitlements and resources that have been provided to meet the
purpose;
(iv) Recommendations for continuing to meet the purpose; and

(v) if the asset is a state corporation, the financial position of the state corporation;

(b) The recommended method of privatization;

(c) The estimated costs of implementing the proposed privatization;

17
 (d) Recommendations for dealing with the employees directly affected by the proposed
privatization, including dealing with any benefits they might be .owed;

(e) The benefits to be gained from the proposed privatization;

(f) A work plan for the proposed privatization

(g) Information regarding any written law, the repeal, amendment or enactment of which will
be necessary for the proposed privatization to be carried out; and

(h) Proposals on how Kenyans are to be encouraged to participate in the transaction.

METHODS OF PRIVATIZATION
The Different Approaches

The following methods shall be used for privatization;

i. public offering of shares;

ii. concessions, leases, management contracts and other forms of public-private partnerships;
iii. negotiated sales resulting from the exercise of pre-emptive rights;
iv. sale of assets, including liquidation;

v. any other method approved by the Cabinet in the approval of a specific privatization
proposal.

BENEFITS OF PRIVATIZATION

i) The improvement of infrastructure and delivery of public services by the involvement of

private capital and expertise;

ii) The reduction of the demand for government resources;

iii) The generation of additional government revenues by receiving compensation for

privatizations;
iv) The improvement of the regulation of the economy by reducing conflicts between the
public sector’s regulatory and commercial functions;
v) The improvement of the efficiency of the Kenyan economy by making it more responsive
to market forces;
vi) The broadening of the base of ownership in the Kenyan economy; and
vii) The enhancement of the capital markets.

18
Some of the institutions that have been privatized in Kenya;

Year Name
1988 Kenya Commercial Bank
1996 Kenya Airways
2001 Mumias Sugar Co.
Kenya Electricity Generating Company
2006 Limited
2006 Kenya-Uganda Railways
2007 Telkom Kenya
2007 Kenya Reinsurance
2008 Safaricom Kenya Limited
National Bank of Kenya
Housing Finance Company of Kenya
East Africa Portland Cement Co.
Kenya Power & Lighting Co.

STATE FIRMS SLATED FOR PRIVATISATION

Institution and Public Shareholding Shareholding

Kenya Energy Generation Company (KenGen) - GoK 70
Kenya Ports Authority (KPA) - GoK 100
Kenya Ports Authority – Outsourcing of Stevedoring 100
Services (KPA)
Kenya Ports Authority – Development of Berths No 11-14 100
Chemilil Sugar Company – ADC 96.2
Chemilil Sugar Company – Development Bank of Kenya 1.4
(DBK)
South Nyanza Sugar Company – GoK 98.8
South Nyanza Sugar Company- ICDC 0.7
South Nyanza Sugar Company – Industrial Development 0.3
Bank (IDB)
Nzoia Sugar Company – GoK 97.9
Nzoia Sugar Company – IDB Capital limited 0.9
Miwani Sugar Company Limited (Under receivership) ADC 16.9
Miwani Sugar Company Limited – Development Bank of 0.3
Kenya
Muhoroni Sugar Company Limited(Under receivership) 16.9
ADC
Muhoroni Sugar Company Limited(Under receivership) 0.3

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 DBK
Kabarnet Hotel – Kenya Tourist Development Cooperation 98.2
(KTDC)
Mt. Elgon Lodge Limited (KTDC) 72.9
Mt. Elgon Lodge Limited (Kitale Municipal Council)) 13.5
Mt. Elgon Lodge Limited (Trans Nzoia County Council) 13.5
Golf Hotel Limited (KTDC) 80
Golf Hotel Limited (Kakamega Municipal Council) 20
Sunset Hotel (KTDC) Kisumu Municipal Council 4.6

Kenya Safari Lodges and Hotels Limited (KTDC) 63.4

Kenya Safari Lodges and Hotels Limited (KWS)
KTDC Associated Companies
i. International Hotels Kenya Limited (KTDC) 40
ii. Kenya Hotels Properties Limited (KTDC) 33.8
iii. Mountain Lodge Limited (KTDC) 39.1
National Bank of Kenya – GoK 22.5
National Bank of Kenya – NSSF 48.1
Consolidated Bank – Deposit Protection Fund 50.2
Consolidated Bank – State Corps 48.8
Development Bank of Kenya 89.3
Agrochemical and Food Corporation (ADC) 28.2
Agrochemical and Food Corporation (ICDC) 28.8
Kenya Wine Agencies (ICDC) 72.6
East Africa Portland Cement (NSSF) 27
East Africa Portland Cement (GoK) 25
Kenya Meat Commission 100
New Kenya Co-operative Creameries 100
Numerical Machining Complex (Kenya Railways) 51
Numerical Machining Complex (University of Nairobi) 49
Isolated Power Stations -

PRIVATIZATION PROGRAMME

The Privatization Programme is a list of public sector assets and operations identified for
privatization as provided for under the Act. The current Privatization Programme was
approved by Cabinet on 11th December 2008 and gazetted by the Deputy Prime Minister and
Minister for Finance on 14th August 2009. The investments in the approved programme,
current public sector shareholding and the objectives for their privatization are as follows.

Entity/operation in the approved Main Objective/Rationale for privatization

Privatization Programme
(i) Development Bank of Kenya (DBK):
Industrial & Commercial Development
Corporation (ICDC) – 89.3%
• To release funds invested by ICDC for lending to
industry and other enterprises and mobilize necessary
resources to support the bank’s future growth, support
the growth and stability of the financial markets,
enhance corporate governance and broaden

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 shareholding.
(ii) National Bank of Kenya (NBK) • To mobilize necessary resources to support the bank’s
Restructuring and Privatization: future growth, support the growth and stability of the
Ordinary shares - GOK 22.5% financial sector and the capital markets, enhance
National Social Security Fund (NSSF): corporate governance, broaden shareholding and to
48.05%. Preference shares: GOK recoup part of Government investment to finance other
KShs. 4.5bn, NSSF KShs. 1.175 bn. development projects.
(iii) Public Owned Sugar Companies. • To enhance efficiency of the sugar sector and meet
GOK/Common Market for East and Southern Africa
• Chemelil Sugar Company – (COMESA) Sugar safeguard commitment to privatize
Agriculture Development Corporation sugar companies. Key objective is to carry out necessary
(ADC): 96.21% and DBK: 1.42%. investments and address all challenges affecting the
sector’s competitiveness before the safeguard is lifted in
• South Nyanza Sugar Company. Ltd. 2012.
– GOK: 98.8%, ICDC: 0.7% and
Industrial Development Bank (IDB): • To raise funds for the rehabilitation of the sugar
0.3%. factories.

• Nzoia Sugar Company. – GoK • To address the excess debt through necessary
97.93%, IDB Capital Ltd. 0.94% restructuring.

• Miwani Sugar Company. Ltd. (Under

Receivership) – GoK: 49%.

• Muhoroni Sugar Company. Ltd.

(Under Receivership) – ADC: 16.9%,
Development Bank of Kenya: 0.3%
(iv) Kenya Wine Agencies (KWAL): • To assure its continued viability.

ICDC – 28.8%
(v) Privatization of the Kenya Tourist
Development Corporation (KTDC)
hotels:
• Kabarnet Hotel – KTDC: 98.2%;
• To mobilize resources to rehabilitate and modernize
existing facilities.
• To raise proceeds to finance the industry through loans
and other investments by KTDC.

• Mt. Elgon Lodge Ltd – KTDC: • To address and identify the best option for ownership
72.92%, Kitale Municipal council: and management of hotels owned by KTDC.
13.54%; and Trans-Nzoia Country
Council: 13.54%;

• Golf Hotel Ltd – KTDC: 80%,

Kakamega Municipal Council: 20%;

• Sunset Hotel Ltd – KTDC: 95.4%,

Kisumu City: 4.6%

• Kenya Safari Lodges and Hotels Ltd.

– KTDC: 63.42%, KWS: 0.02%;

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 • KTDC Associated Companies:

* International Hotels Kenya Ltd. –

KTDC: 40%;

* Kenya Hotel Properties Ltd. –

KTDC: 33.83%,

* Mountain Lodge Ltd. – KTDC:

39.11%,

* Ark Ltd. – KTDC: 5.64%)

(vi) Kenya Ports Authority (KPA) - • To enhance Kenya’s regional competitiveness and
approved operations. facilitate investment and economic growth.

(i) Eldoret container Terminal: KPA • To improve efficiency in delivery of services through
-100%. mobilization of private sector financial and management
resources.
(ii) Stevedoring services: KPA- 100%
• To expand capacity through mobilization of private
(iii) Development of Berths 11-14; sector capital and management resources.
KPA- 100%
(vii) Consolidated Bank of Kenya (Deposit • To mobilize necessary resources to support the bank’s
Protection Fund – 50.2%, State future growth, support the growth and stability of the
Corporations and other Government financial sector, enhance corporate governance and
institutions- 48.8%) broaden shareholding.
(viii)Agrochemical and Food Company – • To address financial and management resource needs
ADC: 28.2% and ICDC: 28.8% and the company’s excess debt.
(ix) Kenya Pipeline Company Limited • To ensue capacity expansion through mobilization of
(KPC): GOK 100% private sector capital and management resources.
(x) Kenya Electricity Generating • To mobilize resources for additional investments,
Company (KenGen) - Sale of Part of enhance transparency and corporate governance,
Government shares. GOK – 70% broaden shareholding, develop the Capital Markets and
raise resources to support the Government budget.
(xi) East African Portland Cement – • To mobilize resources for additional investments,
NSSF: 27%, GOK: 25% enhance transparency and corporate governance,
broaden shareholding in the economy, develop the
Capital Markets and raise resources to support the
Government budget.
(xii) Kenya Meat Commission (KMC): • To address KMC’s future viability and the required
GOK – 100% financial and management resources through
restructuring and privatization.
(xiii)Privatization of the New Kenya Co- • To address future governance and sustainability of its
operative Creameries – GOK - 100% operations.
(xiv) Numerical Machining Complex – • To address mobilization of resources for investment in
Kenya Railways Corporation: 51%, the company and the utilization of the company’s idle
Nairobi University 49%. assets through restructuring and privatization.
(xv) Isolated Power Stations. • To facilitate comprehensive review of the most
appropriate and effective way of operating the stations in

22
 the future.

STATUS
Entity/operation in the approved Privatization Programme and the government objective

1. Development Bank of Kenya (DBK):

The Objective:
To release funds invested by ICDC for lending to industry and other enterprises and mobilize necessary
resources to support the bank’s future growth, support the growth and stability of the financial markets, enhance
corporate governance and broaden shareholding.
The Status:
Detailed proposal has been submitted to the Treasury for submission to the cabinet.

2. National Bank of Kenya (NBK)

The Objective:
To mobilize necessary resources to support the bank’s future growth, support the growth and stability of the
financial sector and the capital markets, enhance corporate governance, broaden shareholding and to recoup part
of Government investment to finance other development projects.
The Status:
Detailed proposal has been finalized for submission to the cabinet

3. Public Owned Sugar Companies

The Objective:
To enhance efficiency of the sugar sector and meet GOK/Common Market for East and Southern Africa
(COMESA) Sugar safeguard commitment to privatize sugar companies. Key objective is to carry out necessary
investments and address all challenges affecting the sector’s competitiveness before the safeguard is lifted in
2012.
To raise funds for the rehabilitation of the sugar factories.
To address the excess debt through necessary restructuring.

The Status:
Most of the necessary work to prepare detailed proposal has been completed.
Detailed proposal finalized after stakeholders workshop held on 23rd Oct 2009 in Kisumu

4. Kenya Wine Agencies (KWAL)

The Objective:
To ensure its continued viability
Bring a Strategic Equity Partner on board obviate pressure from current suppliers

The Status:
Most of the work necessary to finalize detailed proposal has been completed

5. Kenya Tourist Development Corporation (KTDC) hotels

The Objective:
To mobilize resources to rehabilitate and modernize existing facilities.
To raise proceeds to finance the industry through loans and other investments by KTDC.
To address and identify the best option for ownership and management of hotels owned by KTDC.

The Status:
Consultancy work at an advanced stage.

23
6. Kenya Ports Authority (KPA) - approved operations
The Objective:
To enhance Kenya’s regional competitiveness and facilitate investment and economic growth.
To improve efficiency in delivery of services through mobilization of private sector financial and management
resources.
To expand capacity through mobilization of private sector capital and management resources.

The Status:
Procurement of transaction advisory services at final stage.
7. Consolidated Bank of Kenya
The Objective:
To mobilize necessary resources to support the bank’s future growth, support the growth and stability of the
financial sector, enhance corporate governance and broaden shareholding.

The Status:
Identification of transaction advisory services completed
Negotiation with consultancy team scheduled to take place this week

8. Agrochemical and Food Company ADC

The Objective:
To address financial and management resource needs and the company’s excess debt.

The Status:
Identification of transaction advisory team completed
Negotiation with consultants scheduled to take place this week

9. Kenya Pipeline Company Limited (KPC)

The Objective:
To ensue capacity expansion through mobilization of private sector capital and management resources

The Status:
Transaction advisors identified contracts to be signed after 14 days appeal window

10. Kenya Electricity Generating Company (KenGen)

The Objective:
To mobilize resources for additional investments, enhance transparency and corporate governance, broaden
shareholding, develop the Capital Markets and raise resources to support the Government budget.

The Status:
To await recovery of market

11. East African Portland Cement

The Objective:
To mobilize resources for additional investments, enhance transparency and corporate governance, broaden
shareholding in the economy, develop the Capital Markets and raise resources to support the Government
budget.

The Status:
To await recovery of market

12. Kenya Meat Commission (KMC)

The Objective:
To address KMC’s future viability and the required financial and management resources through restructuring
and privatization

The Status:
Evaluation of Expression of Interest for consultancy services ongoing

13. New Kenya Co-operative Creameries

24
 The Objective:
To address future governance and sustainability of its operations
Improve its competitiveness

The Status:
Evaluation of Expression of Interest for Consultancy Services ongoing

14. Numerical Machining Complex

The Objective:
To address mobilization of resources for investment in the company and the utilization of the company’s idle
assets through restructuring and privatization

The Status:
Procurement of consultancy services on hold

15. Isolated Power Stations

The Objective:
To facilitate comprehensive review of the most appropriate and effective way of operating the stations in the
future

The Status:
Evaluation of Expression of Interest for Consultancy services ongoing

References

Kikeri,S, (1997), Privatization; The lessons of Experience , World Bank.

Others
Sr. Weblink Title/Information
no

1. http://www.privatization.org/database/whatisprivatization/privatization_t Types and Techniques of

echniques.html Privatization(good one)

2. http://www.privatization.org/database/whatisprivatization.html About privatization in

general(good one)
3. http://www.gassmannconsulting.com/privatisation.htm Overall view

4. http://www.indymedia.ie/openwire?search_text=privatisations Articles u may want to go

through
5. http://www.waronwant.org/?lid=6533 Privatisation, Power & Poverty

6. http://www.monbiot.com/archives/category/privatisation/ Articles related to privatisation

of the medical industry and
education
7. http://uk.answers.yahoo.com/question/index?qid=1006030100609 Write up on privatisation in
India
8. http://www.turkisheconomy.org.uk/privatisation.html Official government link in
Turkey

25
9. http://www.anarkismo.net/newswire.php?story_id=3472 Privatisation – the rip-off of
public resources - But is
‘nationalisation’ the answer?
10. http://www.actionaid.org.uk/1358/world_bank__imf.html World bank, IMF –conditions of
privatisation
11. http://www.oecd.org/statisticsdata/0,2643,en+2825+293564+1+1+1+1+1 OECD and privatisation
_2649_34847_1_119656_1_1_37467,00.html

12. http://www.privatisation.gov.pk/ Official Pakistan link on

privatisation
13. http://www.brettonwoodsproject.org/article.shtml?cmd[126]=x-126- Bank “soul searching” on
16248 privatisation

14. http://www.johnpilger.com/page.asp?partid=134 Globalisation: New Rulers of

the World- Privatisation
15. http://search.ft.com/search? Newspaper articles from
page=1&queryText=privatisation&drillDown=%2Bgatopics%3A financial times on privatisation
%22Privatisations%22&aje=true

16. http://www.ifla.org/IV/ifla64/188-139e.htm A Review of Privatisation

27. http://weekly.ahram.org.eg/2004/685/ec3.htm Study criticises privatisation

programme-Egypt
18. http://www.eerc.ru/details/download.aspx?file_id=3769 Analysis of the impact of
privatisation on medium and
large scale industries
19. http://www.xterna.com/xt/Privatisation/page2.html Links to newspapers articles and
privatisation related articles
20. http://www.nato.int/docu/colloq/1995/95-12.htm NATO link on privatisation

22. http://www.competition- Privatisation in developing

regulation.org.uk/publications/working_papers/wp55.pdf Countries: a review of the
Evidence and the policy
Lessons
23. http://rru.worldbank.org/Documents/PapersLinks/1076.pdf Utilities Privatization and the
Poor: Lessons and Evidence
from Latin America
24. http://rru.worldbank.org/Documents/PapersLinks/1481.pdf Private Participation in
Infrastructure in
Developing Countries
25. http://rru.worldbank.org/PapersLinks/Impact-Infrastructure-Privatization/ Winners and Losers:
(Click on the title of the article) Assessing the Distributional
Impact of Privatization
26. http://privatisation.mackphilisa.net/pages/History_of_Privatization.vrt History of Privatization in Kenya

26