What is a privatization of power plants?

Privatization is the practice in which a company or public institution is sold to the private sector. In this case, the State ceases to manage a specific entity, passing it to a private company. This term can also refer to the transfer of control of the shares of a specific public company to a private company. It is worth mentioning that privatization can occur in a company, in an investment or in a land.

It is the permanent or definitive transfer of public companies to the private sector, removing from the State the function of managing or controlling them.

Basically, anyone who sees privatization as positive believes that the government is not able to serve all sectors and manage them effectively. Many believe that sectors that have already been privatized, such as telecommunications, have significantly improved in relation to the provision of their services. Another argument is that, by privatizing, negotiations that favor certain political groups are avoided and, therefore, corruption is combated.

Under privatization, the federal government could retain control over the nonpower functions of power plants and etc. Privatization would improve operational efficiencies and allow prices to be set at market rates. Incentives to overconsume power would be ended. Privatization would increase transparency.