Question

Discuss the issues in regulation that come up during privatization.

Answer 1

The desire to involve the private sector in the management and provision of port

infrastructure and services is prompted by the recognition that government regulations and

processes are not always conducive to efficient operations of commerci"al activities and by

recognition of the private sector's relative strength in this field. Also, in recognizing that

investment sources outside government must be tapped in the provision of such infrastructure

and services involvement of the private sector provides the opportunity to share risks and, in

times of rapidly changing economic environmento respond quickly to market/demands and

opportunities. The principal strengths of the private sector 8!e:

A much stronger management capability due to its ability to recruit and

compensate qualified managers and technicians;

a)

b) Relative freedom to operate outside of political and bureaucratic constraints (e.g.

in procurement and the working of overtime);

c) Better company specific labour management;

d) Potentially greater experience in developing facilities and providing services

attuned to the competitive world of global trade; and

e) Access to non-traditional resources for investment in the infrastructure to serve

trade which some individual governments may lack.

These attributes of the private sector enable it to respond rapidly to market changes

through speedy decision making and investment.

Government policy to promote private sector involvement may, therefore, include the

following long-term aims which can be achieved through partnershi