Privatization is a process which the role of government in the economy and the
market is less by it and more economic activities and production assign to the
private sector and in this way, the role of the private sector in the economy is
more prominent. Privatization goals mainly from developed countries to
developing countries are different. Economically, in developed and advanced
industrial countries, states through its privatization process, looking for
achieving goals such as increasing efficiency, revenue and decrease government
financial burden. While in developing countries due to the more difficulties and
problems, other multiple targets also are followed including efficient and
effective use of financial resources of companies, reduction of government
intervention in the economy, assigning the resource allocation to
self-regulating mechanisms of the market, deal with the caught liquidity in the
economy, creating a competitive environment to secure long-term investments, the
achievement of new management skills, access to capital and foreign technology
and distribution of wealth and income among different strata of society.
Privatization process in our country seeks to reduce government intervention in
the market to prevent monopoly, rules Implementation in the market, creating
competition and secure and favorable conditions for investments, the prevention
of uncontrolled import of poor-quality materials and substandard and low-quality
products that are domestically produced. But in general we can say that
privatization has the following objectives:
1- Increasing the efficiency:
Comprehensive studies on evaluating the performance of state-owned companies
shows that on average efficiency of state-owned companies is lower than private
companies that are active in the same field. The inefficiency of state-owned
companies arises from the lack of independence in determining goals and price of
goods and produced services, workers hiring or firing, salaries and bonuses
payment, the purchase and use of new asset. With the privatization of
state-owned companies, a logical relationship between the owner and managers are
defined and managers can have full control over economic enterprises to achieve
targets.
2- Increased competition:
The competition is the main advantage and reason for living of market-based
economic system and any factors which prevent competition in the market,
gradually cause to prevailing economic system dysfunction. One of the objectives
of the privatization are accepted by all scholars is to "increase competition"
in economic activities. So, privatization with meaning of increasing competition
and trend toward market system, is the accepted general concept.
3- The development of capital market:
The implementation of privatization policy, expands the stock ownership in the
society.
The result of this expansion, increased the amount of transactions in the
capital market and financial institutions, there will be new and different. The
development of these financial institutions will establish new financing tools
and will facilitate extensive investments by private units. With the
privatization of public companies and development of stock ownership, owners of
small savings can also share in the ownership of industries and large production
enterprises and this will equip savings and increase public participation in
economic activities.
4- Law reforming:
Inefficiency of public companies is not only due to governmental ownership of
mentioned companies. Troublesome regulations, are the most important factors
that hinder the flexibility and dynamism of economic activity. For this reason,
law Reforming is the first and most important step in providing the conditions
and competitive environment in society. In order to achieve the benefits of the
above-mentioned and in order to achieving the objectives of the General Policies
of Article 44 of the Constitution and create the conditions for the formation of
healthy competitive market mechanism and with regard to protection of the rights
of producers and consumers and culture making and motivate for the private
sector to enter the electricity market and also appropriate confidence
providing, Ministry of Energy during the past few years has made outsourcing of
administrative activities in the field of power generation.
5- Demand growing for electrical energy in the country:
Demand for electricity in parts of the country, the electricity industry has had
to develop its capacity which needs large amounts of liquidity for investment in
such a way that has been rapid growth of electrical energy consumption in recent
years and consumption will increase between 7.5 to 8 per cent on average in the
year.
It is hoped that create a suitable conditions for the growth and development of
our country, Iran.
