There were a lot of privatization projects undertaken by government during Dr M ruling. The reason for such activity is surely to increase effectiveness & efficiency of the operation.

This does not necessarily mean civil servant not doing their job properly but to let the unit run on its own without direct government funding instead. The objective is obviously to reduce government financial burdens and to improve services.

20 years past, what you think of these privatization projects? Do you think they are running the business at optimum cost? Are you satisfied with their services? For any price increases, do you think it really worth your money?

Or, how much profits you gained from these government privatization projects?

Every now and then we faced with consumer price hike; fuel, electricity, toll etc. Every time it happens, what do you do?

My very humble personal view, nowadays, privatization is no longer about effectiveness & efficiency of doing business, but how you can leverage on both factors (effectiveness & efficiency) to enjoy economies of scale. In other word, you need to grow!

I hate 10% toll price hike for the reason of 18% increasing cost but soon record 36% increase in profits. When their profits growth lowers in the coming years, I’m sure they’ll come up again with the proposal of increasing tool price for more profits. Unfortunately, government just approved the proposal!

If you owned parcel of shares in these companies, you’ll be smiling every-time government approve the price increase. If you are one of their employees, you’ll probably get some bonuses out of it, I don’t know. But what happens to regular consumer? They are struggling to survive even without the hike, like me.

And that is the only reason why I don’t buy any of these useless shares. I know they can pay handsome dividend and great capital potential, but I just can’t stand owning something that I hate the most. Foolish I am but I just can’t compromise my personal value for money.

Companies that been granted to serve national interest should be driving more profits from growth area than just raising price. I know they are pressured to do so as a result of inflation effect. In addition, employees are also expecting an annual increment & bonuses too. Otherwise the company will lose talented people to its competitors. It’s normal, nothing wrong with that.

My concern is when you don’t want to pursue growth but expect profits to raise tremendously, ‘rakyat menjadi mangsa’. Have you heard any of our toll operator or water concessionaire ventured oversea after so many years ‘cekik’ its own rakyat? Only recently Plus try to build toll in Indonesia. But why so long?

Same might goes to other entrusted privatized companies.

I like to use AirAsia as a good model (not all that good though). They manage to defy the needs to increase price (except taxes & fuel la since that one out of its control) but keep on delivering MORE profits from MORE flights, MORE destinations & MORE add-on services than just charging MORE.

Don’t they know the keyword to profitability is always MORE and not just HIKE?

For this reason, government plan to buy back the privatized toll operators can be good and should applicable to water concessionaire or any other privatized projects that lack of growth. I know the cost is huge and it won’t be appropriate to get them in during this over-stretch government spending.

However, it can help regular street citizen to survive in the long run and vote them during the general election? Haha…

Second option would be hiring proven CEO (doesn’t matter local or foreigner as long as cost effective) & (maybe) expensive but talented pool of workers that can drive the companies for better growth area. You pay them more in short term but as long as it can be leveraged for more profits in the long run, why not? Maybe you are one of the talented workers to be hired!

Bottomline, don’t burden us with meaningless price hike anymore please….