Privatization of public enterprises of medellin colombia

MEMO

SUBJECT: Privatization of the Public Enterprises of Medellin.

While the Council of the city of Medellin is meeting these days regarding the proposal of the Local Government to privatizethe Public Enterprises of Medellin, I decided to circulate this memorandum in order to expose the reason why regardless some of public services like telecommunications have had success in beingdelivered by private companies, Domestic Public Services such water, energy and natural gas may stay supplied through public action.

The privatization is one of the execution instruments of theneoliberal model that seeks the economic rationality improving the level of performance of the enterprises by increasing their productivity and resources allocation efficiency; also looks for solving thedifficulties between the organs of the central government and the public enterprises and reduce the power of the diverse groups that exercise corporate pressures; privatization is the way for theGovernment to get a new growing motor needed as a consequence of the cut of the public expense and the difficulties phased when accessing the foreign capital in the international markets; and last but notleast it helps to reduce the fiscal deficit of the governments.

The former Major of the City of Medellin, Dr. Sergio Naranjo Perez, suggested the following reasons to privatize the PublicEnterprises of Medellin in his last communication as a Major “Transformation of the Public Enterprises of Medellin (EPM): a response to your inquires”

1. The need of better coverage of the domesticservices in rural areas of the State.
2. Other relevant policies with more social impact like health care, education and security require more Government resources.
3. The great motivation of the privatesector to be more efficient and profitable than the public one.
4. After the privatization, enterprises will have lower overhead, production and distribution cost which will reflect lower tariffs...