Description

In the broader sense of the word, privatisation means transferring activities that were previously run by the state (in this case, transport and the energy and water supplies) into private hands. Privatisation of the transport, energy and water infrastructures is an option when the state has insufficient financial resources to maintain and / or expand the supply systems, for example. The transfer of public tasks to private actors requires a higher level of state control.

A distinction is made between three types of privatisation:

• Material privatisation: The state withdraws from the production of goods, and activities previously in public hands are transferred to the private sector (the most comprehensive form of privatisation).
• Functional privatisation: The state contracts private companies to carry out activities previously in public hands.
• Formal privatisation: The activity remains the responsibility of the state but the legal form is converted into a private company.

Requirements

• A properly functioning country-wide administration and monitoring system with access to the relevant information and sufficient technical and human capacities for its design, implementation and monitoring
• Clarification of responsibility for maintenance work
• Clear and coherent political strategy and targets for policy-makers and public authorities
• Inclusion of municipalities
• Legal certainty
• Participation of all stakeholders involved, e. g. science / research, agricultural advisory services, civil society, public and private sector (incl. farmers and their interest groups)
• Qualified staff to operate the power stations in the long term (network operators)
• Regulatory framework
• Secure financing by the private enterprises
• Skilled / specialised personnel to plan the network infrastructure
• Technical solutions adapted to local circumstances

Possible Negative Effects

• Higher prices compared with a public supply
• Marginalised groups could be disadvantaged
• Social and environmental aspects neglected
• Loss of democratic control
• Optimisation of utility companies resulting in job losses