Privatization is a process which the role of government in the economy and the market is less by it and more economic activities and production assign to the private sector and in this way, the role of the private sector in the economy is more prominent. Privatization goals mainly from developed countries to developing countries are different. Economically, in developed and advanced industrial countries, states through its privatization process looking for achieving goals such as increasing efficiency, revenue and decrease government financial burden. While in developing countries due to the more difficulties and problems, other multiple targets also is followed including efficient and effective use of financial resources of companies, reduction of government intervention in the economy, assigning the resource allocation to self-regulating mechanisms of the market, deal with the caught liquidity in the economy, creating a competitive environment to secure long-term investments, the achievement of new management skills, access to capital and foreign technology and distribution of wealth and income among different strata of society.
Privatization process in our country seeks to reduce government intervention in the market to prevent monopoly, rules Implementation in the market, creating competition and secure and favorable conditions for investments, the prevention of uncontrolled import of poor-quality materials and substandard and low-quality products that are domestically produced. But in general we can say that privatization has the following objectives:
1- Increasing the efficiency:
Comprehensive studies on evaluating the performance of state-owned companies shows that on average efficiency of state-owned companies is lower than private companies that are active in the same field. The inefficiency of state-owned companies arises from the lack of independence in determining goals and price of goods and produced services,workers hiring or firing, salaries and bonuses payment, the purchase and use of new asset. With the privatization of state-owned companies, a logical relationship between the owner and managers are defined and managers can have full control over economic enterprises to achieve targets.
2- Increased competition:
The competition is the main advantage and reason for living of market-based economic system and any factors which prevent competition in the market, gradually cause to prevailing economic system dysfunction. One of the objectives of the privatization are accepted by all scholars is to "increase competition" in economic activities. So, privatization with meaning of increasing competition and trend toward market system, is the accepted general concept.
3- The development of capital market:
The implementation of privatization policy, expands the stock ownership in the society.
The result of this expansion, increased the amount of transactions in the capital market and financial institutions, there will be new and different. The development of these financial institutions will establish new financing tools and will facilitate extensive investments by private units. With the privatization of public companies and development of stock ownership, owners of small savings can also share in the ownership of industries and large production enterprises and this will equip savings and increase public participation in economic activities.
4- Law reforming:
Inefficiency of public companies is not only due to governmental ownership of mentioned companies. Troublesome regulations, are the most important factors that hinder the flexibility and dynamism of economic activity. For this reason, law Reforming is the first and most important step in providing the conditions and competitive environment in society. In order to achieve the benefits of the above-mentioned and in order to achieving the objectives of the General Policies of Article 44 of the Constitution and create the conditions for the formation of healthy competitive market mechanism and with regard to protection of the rights of producers and consumers and culture making and motivate for the private sector to enter the electricity market and also appropriate confidence providing, Ministry of Energy during the past few years has made outsourcing of administrative activities in the field of power generation.
5- Demand growing for electrical energy in the country:
Demand for electricity in parts of the country, the electricity industry has had to develop its capacity which needs large amounts of liquidity for investment in such a way that has been rapid growth of electrical energy consumption in recent years and consumption will increase between 7.5 to 8 per cent on average in the year.
It is hoped that create a suitable conditions for the growth and development of our country, Iran.