As far as Islamic Sharia is concerned, privatization is permissible as long as it is done for the benefit of the society and there is no corruption on the part of government officials.
On this, Dr. Monzer Kahf, a prominent Muslim economist, says:
As far as Islam is concerned, privatization is permissible. In principle, all businesses must be private, so one can pay zakah and benefit from the private motivation of profit-making. Certainly in privatizing publicly-owned enterprises, prime consideration must be given to the interests of the Ummah, the society, the poor and the needy, and it must be done without corruption on the part of government officials.
There are certain areas that the Sharia does not leave to the private sectors, such as mosques, even though they may be built and financed by private people, they enter in the domain of Awqaf (endowments), which is not owned by any person but left for the benefit of all those who perform Prayers and spiritual retreat in the mosque (I’tikaf). You can’t privatize mosques and make their entrance paid for by admission fees!