Abstract
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The focus of the paper is on the evaluation of the reorganization of existing public enterprises in Slovenia under the adopted Public-Private Partnership Act, where the public policy makers intended to design policies aiming to improve the efficiency of local public utilities delivery. Before the implementation of Public-Private Partnership Act, the role of private capital in public enterprises was not sustainable in legal terms, the regulation was not clear on what status of public enterprise actually means, and there were also shortcomings in the relationship between the founder of public enterprise and the public enterprise itself, creating sever agency problems. Namely, the implementation of the Public-Private Partnership Act affected also the legal status of public enterprises, where solely public ownership of those entities was prescribed, and legal status of public enterprises was defined if they wanted to avoid obligatory concessions and subsequent competition in service provision. This meant that owners of public enterprises, either central or local governments, needed to buyout the private investors in public utilities’ providers.
Nevertheless, although the legal provisions are rather clear, and the majority of providers retained their public status even afterwards, it is not entirely clear, whether buyout was implemented in full and what motives guided municipalities in buying the ownership shares, which was necessary for the reorganization of existing public enterprises into public enterprises with 100% ownership of municipalities; whether the motives were economic motives of rationality and efficiency, or whether the motive was just to avoid tendering for concessions etc. The objective of the paper is therefore to get an insight into the actual status quo of reorganization process and to find the actual motives, advantages and disadvantages of reorganization of existing public enterprises. It is evident that public ownership and control has increased, nevertheless the outcomes of reorganization are not so clear, and lack of empirical studies exists. Consequently, this study focuses on public utilities’ providers in Slovenia at the local level, specifically to those in the field of water and waste water management.
The paper is based on a case study analysis, using primary data, collected through a structured interview for selected water and wastewater utilities providers. The results indicate that the most important motive in the case of mixed ownership to transform into 100% municipal ownership was to avoid public tender for concessions. On the other hand, publicly owned public enterprises see important motives for retaining the status in larger ability to control and in easier regulation of service provider. The results of the study indicate that the reorganization process brought mostly advantages, however, selected public enterprises do not see any essential changes in the effectiveness of their business due to implementation of new legislation. These results bring useful information to municipalities, local public utilities’ providers and public policy makers to formulate better policy proposals, to implement good governance and to be able to manage delivery of public utilities more effectively. Besides, the study portrays also the evidence on the legal and organizational structure of utilities’ providers and the outcome of the reorganization process.
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