Privatization Swot Analysis

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The transfer of ownership, property or business from the government to the private sector is termed privatized. The government ceases to be the owner of the entity or business. The process in which a publicly traded company becomes private, investors can no longer purchases stake in a company. One main arguments for privatization of publicly owned operations is estimated increased in efficiency that can result from private ownership the increased efficiency is thought to come from the greater importance private owners tend to place on profit maximization as compared to government which tends to be less concerned about profits .Most companies start as private companies funded by a small group of investors. As they grow in size, they will often…show more content…
The proposals could revive previous plans to raise funds for the company, which is battling the worst power supply shortages since 2008 and faces a funding crunch as it races to bring new power plants online. Given Eskom’s constrained balance sheet and government constraints fiscal points, there is a need to explore all options. The government would still retain control of the company and authorities would also consider amending regulations to allow private firms to generate electricity for their own use and sell any surplus to the national grid. Another option could be increasing private generation independent by producers. The government had revived a discarded policy that stipulates of up to the private sector could take a stake 30% in Eskom power-generating assets. Privatising of Eskom could lead to job losses and undermine efforts to expand grid access to more black South Africans. Eskom’s funding gap to 2018 is estimated at R23bn cash injection from the government this year. The utility has applied to the energy regulator to hike electricity prices to 23, 5% from July this year Eskom could earn…show more content…
Privatization urges improvements in the company through competition. When a state owned entity is privatized it loses its government protection and is forced to adapt to the market by providing better services or products in order to survive and thrive .Privatization reduces the government political interference . The government sometimes seems incapable of making decisions especially when they impact their political footing such as layoffs and pay cuts which are bound to attract negatively

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