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Elective Public Management – Week 7 Privatisation

Elective Public Management – Week 7 Privatisation. Prof. Dr. Andreas Bergmann Institute of Public Management andreas.bergmann@zhaw.ch. Privatisation. Legal forms Administration unit Department Dependent agency (without an own legal identity) Independent agency (with own legal identity)

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Elective Public Management – Week 7 Privatisation

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  1. Elective Public Management – Week 7Privatisation • Prof. Dr. Andreas Bergmann • Institute of Public Management • andreas.bergmann@zhaw.ch

  2. Privatisation • Legal forms • Administration unit • Department • Dependent agency (without an own legal identity) • Independent agency (with own legal identity) • Incorporated company under public law • Incorporated company (limited company, companionship, foundation) under private law • Incorporated company in private ownership „spin-off“ (Verselbständigung) „pretentious privatisation“ Privatisation

  3. Privatisation • Examples of „real“ privatisations • classical case: British Airways • Preparation from 1981: „turn-around“, i.e.- new management (Sir John King, Colin Marshall)- cut back of 23,000 positions- cut back of routes and fleet - unchanged: „grandfather rights“ at Heathrow airport- new image: „The World‘s Favourite Airline“ • Privatisation only in 1987 (together with British Airports Authority)- IPO of all shares (100%)

  4. Privatisation • Examples of „real“ privatisations • More international examples • British Telecom (1984, IPO, successful) • British Rail (1994, break up into 30 entities, very controversial, in some parts clearly failed, e.g. Railtrack) • Deutsche Telecom (1996, IPO, government still holds about 15%, successful) • Air NewZealand (1989, sale to an investor, government holds one „golden share“; initially successful, but had to be rescued by government in 2001, currently about 80% government owned, to be sold)

  5. Privatisation • Examples of „real“ privatisations • In Switzerland • Ausserrhoder Kantonalbank (1997 sold to UBS as part of financial restructuring) • Solothurner Kantonalbank (1995 privatised, in the mean time taken over by Bâloise Group) • Swiss (2005 sold to Lufthansa)

  6. Privatisation • Examples of „pretentious“ privatisations • In Switzerland • Swisscom (IPO of minority 1998, government still holds about 56% of the shares, to be sold down to 51%) • Post (no private shareholders, still agency) • SBB (like Post) • RUAG Aerospace Defense Technology • Skyguide

  7. Privatisation • Goals of privatisation • Efficiency gains • Competitiveness in conjuction with market liberalisation • Restriction of political influence • …

  8. Privatisation • Four circle model of Swiss federal government • Report „über die Aufsicht bei ausgelagertenVerwaltungsbereichen und rechtlich verselbständigtenBetrieben“ published on 25 June 1997 • Corporate principle

  9. Privatisation • Four circle model (2)

  10. Privatisation • Scientific position • Market liberalisation and privatisation should be symmetrical • Strongly regulated industries  political control • No regulation  full privatisation; if any regulation left (e.g. telecom) government as regulator • Intense preparation needed • Difficulties arise from asymmetries

  11. References • BERGMANN, A.: Erfolgsfaktoren im öffentlichen und privaten Sektor. In: Bergmann, A./Hofmeister, A. (Hrsg.): Privatisierung – schlägt das Pendel zurück. SGVW-Schriftenreihe Nr. 44. Bern: 2004. 9-14. • SCHEDLER, K./PROELLER, I.: New Public Management. 3. Auflage. UTB, 2002. 163-182. • MÜLLER, G.: Zur Verantwortlichkeit bei ausgelagerten Bundesaufgaben. In: NZZ, 10. Juni 2004. • VICKERS, J./YARROW, G.: Privatization: An Economic Analysis, MIT Press, Cambridge, Mass, 1988

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