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Home > Privatization Alert - October 2008
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Privatization Alert - October 2008
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Focus: Corporate governance of state-owned enterprises
Governments around the world are interested in improving the governance of the state-owned enterprises remaining in their portfolios in order to raise the quality of services offered, improve performance and reduce drain on the country's public finances. This is partly in response to consumer pressure for better services at lower cost, but also in response to private companies, which are demanding a level-playing field when competing with state-owned firms. As state-owned enterprises themselves venture abroad, governance, transparency and disclosure practices become especially important.
Aiming to promote good governance of state-owned enterprises, the Organisation for Economic Co-operation and Development (OECD) issued in 2005 the Guidelines on Corporate Governance of State-Owned Enterprises.
The guidelines are a voluntary tool to help both industrialized and developing countries introduce appropriate governance reforms in their state-owned enterprise sector. Among other things, the guidelines address the need for a legal and regulatory framework that ensures a level-playing field with the private sector by limiting distortions; the need to establish a clear and consistent ownership policy; transparency and accountability in governance with high standards of accounting; and recognition of the rights of all shareholders.
OECD has also set up a Global Network on Privatisation and Corporate Governance of State-Owned Assets, comprising OECD member and non-member countries, which aims at promoting dialogue and exchanges in support of improvements in the governance of state-owned enterprises and in support of governments seeking to privatize effectively state-owned assets. At its first meeting in March 2008, among other things, the Global Network discussed the role of state-owned enterprises in national economies and the importance of good governance for effective privatization.
Status and upcoming transactions
Europe and Central Asia: Croatia has announced the privatization sale of a metal constructions and parts plant and a steel constructions plant. Serbia has scheduled the privatization sale of several state-owned enterprises via auctions over the next couple of months. Turkey's plans to sell most of the remaining state-owned electricity distribution grids by the end of 2009. Kyrgyzstan is in the process of assessing bids received from the sale of its 78 percent stake in Kyrgyztelecom.
>> Complete list of regional project opportunities
>> Detailed country analysis by region
Middle East and North Africa: A new law on privatization has passed in Iran.
>> Complete list of regional project opportunities
>> Detailed country analysis by region
Sub-Saharan Africa: Nigeria is planning to bring in a new core investor in Nigerian Telecommunications Ltd. and Mobile Telecommunications Ltd. by February 2009, ahead of the initial planned timeframe. Under an agreement between the government and Transcorp, which currently owns 51 percent of both companies, the new core investor will acquire 29 percent of Transcorp’s shares and 22 percent of the government’s 49 percent stake. The government is also planning to initiate the privatization of Petroleum Pipelines Marketing Company, which operates a network of gasoline distribution pipelines and depots across the country, before the end of this year.
>> Complete list of regional project opportunities
>> Detailed country analysis by region
East and South East Asia: Philippines is proceeding with the divestment of its 40 percent stake in Petron Oil.
>> Complete list of regional project opportunities
>> Detailed country analysis by region
Latin America: Brazil is expected to begin the process of privatizing its airports next year, which would include the international airport in Rio de Janeiro.
>> Complete list of regional project opportunities
>> Detailed country analysis by region
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