Privatisation of TNB

Topics: Privatization, Electricity generation, Public ownership Pages: 9 (2611 words) Published: July 29, 2014


INSTITUT PENGURUSAN DINAMIK SARAWAK,
WISMA MORNIE, NO.1, JALAN HAJI TAHA,
93400 KUCHING, SARAWAK.

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NAME : LAU KOH SIN ( SW1306FD3452 )

SEMESTER : 3
Student Details
UGUB3013 /Student Details
Course Code / Title : BAGF0014/ FUNDAMENTALS OF ORGANIZATION AND

Assignment Title : WRITTEN REPORT ASSIGNMENT
Lecturer : MS. NORMAH BUJANG
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I hereby declare that this assignment is my own work, and does not involve plagiarism or collusion.

Student Signature:LAU KOH SIN Date: 18 FEBRUARY 2014

1.0 Introduction
1.1 Privatization in Malaysia

In Malaysia, privatization is generally defined as the transfer of ownership from public to private sector. It could also refer as changing status of a business, service or industry from state, government or public to private ownership or control. Occasionally, the term privatization is to include the use of private contractors to provide services previously rendered by the public sector. Full privatization is not the norm in Malaysia; hence most privatization involves transferring only some of the government ownership.

In summary, privatization is a policy of transferring government ownership to private ownership through various methods. In this definition, privatization includes the transformation of government-controlled business into privately owned enterprises. It is also includes the transfers of a full or partial government ownership to private ownership through the sale of equity in the capital market. Privatization in state-owned enterprises is based on a strong proposition that private sector enterprises are subject to economic disciplines which are not present in the state enterprises. The disciplines of competition and the need to earn a profit in order to grow keep private sector enterprises relatively more efficient then their public sector counterparts.

Therefore, one common objective of privatization by transferring state ownership to private investors is to make the enterprise become more efficient and more profitable. The privatization may also have other objectives such as changing behavior of economic agents and discipline of the market, reducing budget deficit to harness savings and finally promoting wide share ownership.

On the other hand, different countries have their own specific objectives of privatization of state-owned enterprises. Those objectives depend upon the condition and the situation the countries are facing. However, whatever the political motives of those countries toward privatization policy, every country tends to have common objectives of increasing firm efficiency and profitability and reducing government financial burden. Privation started getting attention in Malaysia from middle year 1983 when Tun Dr. Mahathir Mohamed launched Malaysia incorporated Policy who is also had alluded role of the private sector in development and management of the country. Privatization was contrary with nationalization, namely a process increase government ownership and mastery in economic.

Privatization involves several certain interest or government investments to private sector. Prime Minister in opening speech conference “the Securities industry in Malaysia” in 1984 said government world over is notorious for inefficiency when running enterprises, even aided by monopoly and authority of government. On the other hand, private sector is better motivated and generally more efficient. It is hoped that privatization will improve economic and general performance or services,...
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