Imrecon

Imrecon's is experienced in advising regulators of privatized businesses, commercialized publicly owned businesses, public private partnerships and businesses with no owned equity, including privatized businesses which have failed and been taken out of private sector ownership as a result. 

Imrecon has advised governments on certain aspects of proposed privatisations, notably broader policy issues affected by the introduction of private equity, risk issues affecting the confidence of private investors prior to a sale and the shape of the regulatory regime designed to sustain investor confidence and further broader public policy objectives for the sector.

Conditions for successful privatization

Imrecon considers privatization as just one possible tool in the armoury of public policy makers.  It is a powerful tool, which can engage private sector investors in corporate governance to help harness the interests of management, introduce new capability and insulate the business from distracting political considerations.  But publicly owned monopoly businesses can also perform well, provided there are high standards of governance and effective regulation.  Equallly, privately owned monopoly businesses can perform poorly, certainly from the perspective of users, if regulation is not effective - a poorly regulated monopoly is a drain on the economy whoever owns it.

Imrecon therefore believes strongly that getting the competition environment and, where monopoly remains, the regulatory regime right are important preconditions for successful privatization. Adopting established models of regulation used in other countries is not enough by itself - considerable care needs to be taken in establishing appropriate legal and institutional frameworks, adapting to the local economics of the sector and needs of its users and ensuring the competition and regulatory environment has real credibility, is protected from political interference, is well resourced and has proportionate powers.

When those preconditions are met, introducing private equity can transform poorly performing governance and the performance of a business's management by empowering them, aligning their interests, holding them to account and creating a performance-focused management incentive environment. 

Imrecon's advice

Imrecon advice covers a wide range of strategic and regulatory issues, regime design, valuations, cost of capital estimates, bidder consultation, regulatory training, price cap modelling and general regulatory support.