Past programmes Seventh Core Training Programme Sixth Core Training Programme Fifth Core Training Programme Fourth Core Training Programme Third Core Training Programme Second Core Training Programme First Core Training Programme

Kandalama Hotel, Dambulla, Sri Lanka, 4-15 December 2000

Summary | Themes | Programme

SAFIR offered its second core course on Infrastructure Regulation, at Kandalama Hotel, Dambulla, Sri Lanka from 4 to 15 December, 2000. The residential programme covered the main elements of reform of the infrastructure sectors like electricity, gas, telecommunications, water, and transport. It provided an excellent opportunity to the staff of regulatory commissions, government, and private sector to learn the fundamentals of independent regulation and regulatory economics and to share their experiences to develop practical solutions to regional problems. The course began with an overview of international experiences in reform, regulation, and private sector participation. Acting on feedback from the first training course, more focus was given to reforms in the region by covering various sectors and country-specific case studies that highlighted the key issues being faced by the regulators, including the introduction of competition into the market and methods of price regulation. The second week covered the technical and economic aspects involved in undertaking a price review, financial techniques of regulation, review of decisions made by several regulatory bodies, and an overview of how regulators can use efficiency measures, particularly in the regional context. Approaches adopted to deal with issues like convergence, development of multi-utility companies, and implications for regulators in the telecom sector were also discussed in detail. Besides these, issues in institutional design of regulatory agencies in South Asia were debated on. Other useful topics were the existing appeal mechanisms embodied in legislation establishing regulatory bodies in South Asia and experience in reviewing regulatory decisions.

An all-encompassing course that provides a solid foundation to basic principles, settled practices, alternative (theoretical) models, and accepted administrative structures.

Senior port regulator

The course provides a ‘definite’ opportunity for organizations heading towards privatization.

Executive from water sector public utility

A key part of the training course was the ‘mock regulatory price review’ exercise given to the participants at the end of the first week. Different teams were formed, each representing a particular interest during the price review process. The objective of this mock review was to understand the issues being discussed and to apply the techniques in a real case. Water industry was chosen as a case study to limit the degree of preconceived notions and experience because fewer people from water sector attended the course. At the end of the programme all groups made presentations before the regulatory commission to put forward issues and concerns as perceived by them.

Sixty-five participants from Bangladesh, Bhutan, India, Mozambique, Nepal, South Africa, Sri Lanka, and USA attended the course. Participant from various organizations such as Andhra Pradesh Electricity Regulatory Commission, Central Electricity Regulatory Commission, Telecom Regulatory Authority of India, India; Bureau of Infrastructure Investment, Ceylon Electricity Board, Lanka Electricity Company (Pvt.) Ltd, Ministry of Finance, National Water Supply and Drainage Board, Public Enterprises Reform Commission, Lanka Bell, Sri Lanka Ports Authority, Telecommunications Regulatory Commission of Sri Lanka, Sri Lanka; Ministry of Water Resources, Nepal Electricity Authority, Tariff Fixation Commission, Nepal; Bangladesh Shipping Corporation, Bangladesh Telegraph and Telephone Board, Chittagong Port Authority, Grameen Phone Ltd., Power Division, Ministry of Energy and Mineral Resources, Petrobangla, Bangladesh; Department of Power, Bhutan; Greater Johannesburg Metropolitan Council, South Africa; and National Directorate of Energy, Mozambique attended the course. About twenty regional and international resource persons from India, Bangladesh, Sri Lanka, UK, USA, and the World Bank delivered lectures. The course received a positive and encouraging feedback from the participants.

Programme

Reforming the Infrastructure Sectors and Introducing Competition: What are the main lessons from worldwide experience of infrastructure sector reform? How does progress in South Asia stand up against that in other developing countries? Where can more competition be introduced to benefit consumers, and how can the impacts, such as the creation of stranded assets, be dealt with? How does competition affect cross-subsidy programs, and how can genuine social objectives be accommodated? What are the most effective methods for introducing competition for the market? How does market structure and unbundling impact on the success of introducing competition? What is the role of the regulator in introducing competition? How is convergence of technologies impacting on competition?

Techniques of Price Regulation: which activities should regulators not regulate? What is international experience in the usage of different price regimes, and what are the main approaches tried in South Asia to date? What are the main building blocks in calculating price controls and what are the key steps in conducting a price review? How are perceptions of regulatory risk be reduced by different approaches to pricing?

Financial Aspects of Regulation: What is the appropriate cost of capital for the industry, and how can techniques used elsewhere be applied to the situation of South Asia? What approaches can be taken towards the treatment of depreciation and asset valuation? What financial techniques are available to help regulators assess the viability of the businesses being regulated?

Non-price Aspects of Infrastructure Regulation: how can concerns about service expansion, increasing access to the poor, performance standards and environmental issues be addressed alongside price regulation? What useful regional and international models exist to guide regulators in these areas?

Design and management of regulatory agencies and the regulatory process: what have been successful design parameters for establishing regulatory agencies? How can regulators establish their legitimacy with consumers, government and regulated companies, and maintain their credibility? How do regulators handle appeal and review of their decisions? What special challenges are involved in regulating public sector entities?

Price Control Case Study: this will present participants an opportunity to work in groups over a period of one week on a realistic case study of setting price controls. The case study will incorporate the various concepts covered in the course and culminate in the presentation to a panel of sitting or ex-regulators from the region.