Price Control Issues In The Privatization Of Public Utilities Reform In The Context Study

When the regional governments respond the state policies to openthe market of public utilities one after another, they are puzzled from theprice-control of the product and service which is the most key problem inpublic-private partnership. The public characteristic of public utilitiesrequires realizing that public interests are maximized and consumersurplus is received to the highest degree. On the other hand, in order torealize the maximizing profit goal, the private enterprises must rely on themonopolizing position to make the monopoly price which will damagemass' interests. Because of the peculiar public quality and naturalmonopoly natures of public utilities, the price of their product can not beregulated by the market. So the government is required to offer pricecontrol. Does the price-control of the government solve effectively thecontradiction in the requirement of pricing between the publiccharacteristic and private characteristic? Through analyzing three basicproblems which are caused by the natural monopoly natures of publicutilities with economics methods, the author draws the validity of price-control. The three basic problems are high price in monopoly, inefficiententering and price discrimination. By analyzing, the author tries to get therational pricing theory which can realize that public interests aremaximized and also can promote the operator's individual interestsmaximizing. During the practical application, the pricing mode should bechosen according to the concrete condition such as the trade characteristic, developing stage and the market. After confirming the pricing modebasically, the author analyze three effective operating forms in pricingcombining China's objective current situation at present. The forms arethe hearing, competing price in advance and getting involved afterwards.Then the author present the operating forms suitable for the presentdemand for development. So the theory of pricing in public-privatepartnership has been perfected on the system aspect and operation aspect. At last, the author presents the conditions that can optimize the pricing inpublic-private partnership of public utilities.