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PRIVATIZATIONDevelopment Studies
Course Teacher : Muhammad Bilal Khalid
NED UNIVERSITY , KARACHIMember:•Ali Mohib •Sajjad Mehdi•Tehreem Siraj•Taliya Salman•Aruba Khan•S.M. Ijlal Mehdi•Hassan Zafar
CONTENTS
• What is privatization ?What is privatization ?• Reasons for privatizationReasons for privatization• Privatization in United Kingdom.Privatization in United Kingdom.• British AirwaysBritish Airways• Water IndustryWater Industry• British petroleumBritish petroleum• British electricityBritish electricity• British prisonsBritish prisons
What is privatization ?
• Privatization is the opposite of nationalism .
• The transfer of ownership of property or businesses from a government to a privately owned entity.
• Raising money.
• Making industry more efficient.
• Spreading share ownership.
Reasons for Privatization
Privatization in United Kingdom
BRITISH AIRWAY
BRITISH AIRWAY• A British Airways Board was established by
the United Kingdom government in 1972 to manage the two nationalized airline corporations.
REASONS BEHIND THE PRIVATIZATION OF BRITISH AIRWAYS
Acquisitions, mergers, cases, regulations, and strikes.
Aver-employment. Productivity was very low compared to its
competitors. Earnings of BA were declining.
BEFORE AND AFTER PRIVATIZATIONEFFECTS OF BRITISH AIRWAYS
PROFIBILITY: After privatization their profits boomed.
NUMBER OF EMPLOYEES
salary increase due to privatization.
After privatization it was increased by 31%
MARKET SHARES OF BA After the privatization of British Airways, market
share it improved by 0.50 %
WATER INDUSTRY•In 1989 water system of U.K was privatized by the Thatcher government
AFTER PRIVATIZATION EFFECTS OF WATER INDUSTRY
•Prices increases 50% in the first 4 years•Pre-tax profits doubled in the first year of the privatization•After privatization number of employees decreased by 21.5%.•The privatization lead to increase in fees , salaries & bonuses
AFTER PRIVATIZATION EFFECTS OF WATER INDUSTRY
•Instead of improving services and investment , the reduction in staff lead to deteriorating of rating services in many areas•The water quality did not improve.•Public health has deteriorated and the pollution of environment has increased•The water industry is no longer a public service but only business to maximize profits.
BRITISH PETROLEUM:
Founded by william knox d`arcy in 1909Established in 1954 by the government of UKBritish petroleum privatized by the government in order to sold its entire share to company by the prime minister of UK (mrs.Thatcher)The government sold its entire share in several slices between 1979-1987)This act of privatization was copied around the world and she the baroness thatcher initiated the boom privatization as said by the minister of welfare lord Freud who in an earlier as a banker at Sg Warburg.
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HISTORY OF BRITISH PETROLEUMMRS.THATCHER(13-OCT-
1925---8-APR-2013) “Fundamental to improving britians
economic performance”
YEAR OF PRIVATIZATION:(1979-1987)
CEO AND CHAIRMAIN OF BP
BOB DUDLEY(CEO) CARL HENRIC SAVANBERG(CHAIRMAN
REVENUE:A states annual income from which expenses are met
Operating income:us $6.412 billion(2014) profit : us $4.003 billion(2014)Total assets:us $ 284.3 billion(2014)total equity:us $ 112.6 billion(2014)Total employes: 85,000
05/02/23
05/02/23
PRIVATE PRISONSThe 1st privately run prison opened for
business on 6th April 1992.At present 14 private prisons out of 144 .The top private companies are 4s justice
services , Serco Custodial services& sudeno. 12.9 % of prisoners population is in private
prisons.Combined values of contracts is around £ 4
Billions .
05/02/23
HISTORY OF PRIVATE PRISONS
1980-1990 : Gathering momentum
1990-1998 : Introducing competition . 1998-2010 : Moving back & forth between
the public and private
2010-present : Deeping and expandind competition.
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MAIN FACTORS
The cost of private prison is less than the cost of public prisons
The private prisons are safer , living condition are good & successful rehabilition of prisoners into the society
The government dependency on private prisons should not be increased because it leads to greater cost
To maintain & ensure the quality & transparency government should keep check and balance
05/02/23
G4S PRISONSFirst company to open and run a private prison
They force prisoners to work 40 hours per week
HMP Oakwood is biggest jail
The World Bank Group ▪ Finance, Private Sector, and Infrastructure Network
THE RESTRUCTING AND PRIVITIZATION OF THE U.K.
ELECTRICITY SUPPLY
The World Bank Group ▪ Finance, Private Sector, and Infrastructure Network
Central Electrcity Generating Board (CEGB)
Before Privitization
•Playing monoply•Low productivity growth•Low return on Assets•Very expensive Coal & Nuclear Power•Emissions of Sulfur dioxide & Nitrogen oxides causing acid Rain & Global warming
The World Bank Group ▪ Finance, Private Sector, and Infrastructure Network
AFTER PRIVITIZATION (1990)
AFTER SIX YEARS•Labour productivity doubled•Consumption of coal fell from 74 million ton to 30 million where as the cosumption of gas increased from 1% to 20%•Ban on Gas for creating electricity was lifted from EU•Over all real unit cost fell by 50%
CEGB
National Power Power Gen Nuclear Electric
Thermal Generating Plant National Grid Nuclear Power
High-Voltage Transmission Network
The World Bank Group ▪ Finance, Private Sector, and Infrastructure Network
• Net benefits of the restruction & privatization• Creates more nuclear programs• Price of export rises• Clean Enviroment• Saves cost in Restructuring
The World Bank Group ▪ Finance, Private Sector, and Infrastructure Network
05/02/23