Benefits of Privatization/Main Arguments

The aim of privatization is to reduce government involvement; however, there are

still cases in which the government has partial control over the service (e.g. Statutory
Corporations). Privatization removes cost inefficiencies by the government. It is
presumed that when services are privatized, their flow of system will be better. It may
also solve pressing issues such as congestion and may promote economic efficiency
(lower and balanced fares) and innovation.

Privatization can take many forms, ranging from the transfer of a public
monopoly to private ownership to complete deregulation with no controls on entry,
prices, and levels of service. (Savage, 1985, 1993). Public ownership of transit is one of
the least defensible government programs, it has led to a huge decline in productivity, a
large increase in costs, and only minor increases in outputs. Privatization will be centered
solely to the masses, and will lead to better services for many transit users.

Producing privatization can lead to more innovative, flexible and responsive

outcomes in which we believe are the solutions to the problems that the state faces today
regarding the booming of transportation setbacks. In this the shift from public to private
partnerships the main task of it is to deliver proper and adequate services to the citizens.
Due to the flux of demands and request from commuters or citizens, there would be a
discrepancy between the public in which they would not be able to properly cater to the
needs of the people, but in the private sector they would be able to take the time to study
and deliver to the wants of the constituents.

The benefits then of Privatization would be situated around the facilitation of

modernization, effectiveness and efficiency, accountability and the overall running of
administration of that certain firm. Modernization would allow flexibility and innovation
to circulate around the company, this would allow the company to keep up with the
changing time, which is inevitable, these innovations would then trickle down to the next
benefit. Effectiveness and efficiency, promising new technology cause by innovation and
modernization would result to greater efficiency and effectiveness because of the up to
date and state of the art equipment. Efficiency due to innovations almost always reduce
the net number of jobs in an industry, allow the same amount of work (or more) to get
done using fewer people.

There is often debate concerning whether particular goods and services should be
provided by public agencies, private firms or a combination. Generally, services that are
considered critical to society and require strategic coordination to achieve social
objectives are best provided by public agencies, although many specific tasks can be
contracted out (PPIAF 2006), both private and public sectors caters and functions
differently but are good in their own ways. For example, public agencies plan and operate
most policing and implementation, although many tasks are contracted out to private
industry. Other goods and services are provided by private firms, but with strategic public
support.