Here are some comforting thoughts for those ministers in the Atal Bihari Vajpayee government who want more debate over privatisation.

Philip Jackson, an international expert who has advised many governments on privatising their regulated industries and companies, says privatisation is a complicated process and a full analysis of the implications needs to be undertaken before acting on it.

Jackson is, at present, managing director and head of JP Morgan's Natural Resources Group, Asia-Pacific.

"You need clear regulation, good governance and sustainable dividends for the privatisation exercise to succeed," said Jackson in an interview with Business Standard on Sunday.

He was in New Delhi to make a presentation on mergers and acquisitions in the oil and gas sector at an international petroleum conference held last week.

"Privatisation takes longer than you think and the complexities of the process are such that we should not be surprised by its pace," Jackson said when asked if the recent roadblocks put up in the way of privatising Hindustan Petroleum Corporation Ltd and Bharat Petroleum Corporation Ltd sent out a wrong signal to international investors.

Quoting George Bernard Shaw, who said, "When destiny confronts a man, it makes him pensive," Jackson argued, "We should take a long-term view and the analysis process should be designed in an action-oriented process."

Jackson, who was involved in the privatisation of Balco and the Andhra Pradesh State Electricity Board, said privatisation was first and last a political act with an economic consequence.

In his view, the privatisation of Balco was a healthy precedent and Nalco, another public sector aluminium giant, should also be privatised even though that process might now be delayed.

His logic of privatisation was simple. For a public sector organisation to stay competitive, it needs to have access to the same financial weaponry that its private sector competition has.

Public sector companies can only be on an equal footing with the private sector if their shareholders give them the desired flexibility.

Therefore, the public good is best served if the government focuses on providing a stable, clear and effective regulatory system and gets out of the business of running industries.

Jackson conceded that the capital market rewarded size and stability of earnings. But that argument was not good enough to justify the merger of Indian Oil Corporation and Oil and Natural Gas Corporation.

"ONGC and IOC are substantial blue-chip companies. They have a bright future whether they function independently or if they are merged," he said.

Referring to the power sector, Jackson said ultimately power reforms needed to deal with the distribution sector within a regulatory framework to make that sustainable.

The problems with the reforms in the power sector in Orissa could have arisen because of the lack of the political will on the part of the government.

"Structural reforms cannot be achieved without political will," he said.

The Dabhol power project, according to him, was an extremely complex problem and his fear was that the physical assets would have become unusable by the time the disputing parties reached a settlement.

Only strong leadership from the central and the Maharashtra governments could resolve the Dabhol crisis.

Analysing what could have gone wrong with the Dabhol project, he said it was possible that in an effort to reduce the power tariff, the promoters might have settled for minimum equity and maximum debt.

"There was not sufficient equity cushion in the project," he said. Also the extent of the Maharashtra government's participation should have been increased, he added.

He said India was showing a growing determination to liberalise the economy. The key challenge before India now was to create a strong, objective and clean regulatory framework to support the liberalisation process.