Seventh Core Training Programme
on Infrastructure Regulation and Reform
Jaypee Palace Hotel, Agra
India, 21–29 October 2005
Summary
Recognizing
the demand for the development of new institutions and new approaches,
SAFIR (South Asia Forum for Infrastructure Regulation) was formed
in May 1999 to promote best practices in the economic regulation
of energy, water, telecommunications, and transportation infrastructure
industries. SAFIR has 27 members from India, Pakistan, Sri Lanka
and Bangladesh. TERI (The Energy and resources Institute) is
the professional partner of SAFIR and is responsible for the
strategic planning and execution of its activities.
Mr A K Basu,
Chairman CERC and also the current Chairman of SAFIR, inaugurated
the programme on 21st October 2005 at the Jaypee Palace Hotel,
Agra.
SAFIR has been organizing training courses specially designed
to meet the requirements of infrastructure regulators, policy
makers and other concerned stakeholders in the region. These
training courses are tailored to the requirements of different
stakeholders in terms of duration and content. SAFIR’s
flagship training activity is its Core Course on infrastructure
regulation and reform. This programme provides the participants
with an opportunity to share the experiences of different countries
in the region. This programme is designed to provide participants
with a strong understanding of the theory and practice of infrastructure
regulation and reform.
SAFIR
organized its Seventh Core Training Programme on ‘Infrastructure
and Regulation and Reform’ in Agra, India during October
21-29, 2005 with the aim to provide a platform for experience
sharing amongst the regulators, officials from public and private
agencies and other organizations dealing with infrastructure
sectors in the region, and build regulatory decision-making
and response capacity in South Asia.
The 9 day program that was held at Jaypee Palace Hotel, Agra
was attended by 60 senior officials and executives from regulatory
agencies, government, utilities, public and private organizations
from India, Pakistan, Bangladesh, Nepal, Sri Lanka, Bhutan and
Malaysia.
 |
 |
The resource persons included experienced regulators, economists
and infrastructure sector experts from India, Pakistan, Sri
Lanka, Bangladesh, Nepal, Abu Dhabi, USA, UK and the World Bank
who have vast experience on various aspects of infrastructure
reforms and regulation.
The training programme covered the reform strategies in the
South Asian region, steps to introducing competition, aspects
relating to techniques of price regulation, and institutional
design issues in various infrastructure sectors such as power,
telecom, water, ports and transport. The training programme
also discussed various non-price issues of infrastructure regulation
such as quality of service in these sectors; regulatory risks
and commitments; institutional regulatory design in South Asia
and scope of multi-sector regulator and stakeholder consultations
during a regulatory process. In addition the training programme
also provided hands on experience of the regulatory price review
through a continuous interactive process during the programme.
The Core Training Programme delivered practical lessons on the
regulation and restructuring of infrastructure from within and
outside the region. A major feature was to present detailed
international and South Asian case studies, which are given
in sectoral breakout sessions so that participants can understand
the details of actual cases of sector restructuring and price
reviews.
The course also offered an opportunity for a hands-on application
of what has been learnt during the programme through a price
control case study. This covers the main building blocks of
price regulation, including asset valuation, cost of capital,
incorporation of efficiency measures, and the incentive properties
of different techniques of price regulation. At the end a mock
regulatory hearing was also held where groups representing different
stakeholders presented their cases before the regulatory panel
for discussion and regulatory decision.
The key
aspect of the programme was the ‘mock regulatory price
review’ exercise given to the participants at the end.
Different teams, each, representing a particular interest during
the price review process, were formed. The objective of this
mock review was to understand the issues being discussed and
to apply the techniques in a real case. The water industry was
chosen as a case study to avoid biased views and experience
of the participants who mainly represented the infrastructure
sectors of electricity, telecom, transport and oil and gas.
At the end of the programme, all groups made presentations before
the regulatory commission to put forward issues and concerns
as perceived by them. These presentations can be downloaded
from the links given below (in 
format): Case study presentations by – Group
1, Group 2,
Group 3, Group
4, Group 5, Group
6, Group 7,
Group 8.
Some of the interesting case studies that were
presented include the Multi Year Tariff framework for KESC (Karachi
Electricity Supply Company) in Pakistan; Delhi privatization
experience; Regulation in Nepal; Private sector view of the
deregulation journey in the oil sector in Pakistan; Creating
a fair Interconnect Regime for the South Asian markets, Urban
transport: policy and regulatory issues in the South Asian region
(Sri Lanka, Bangladesh, India), etc.
| Venue: Jaypee Palace Hotel, Agra |
|
21 October 2005 (Day
1 Friday) |
| 9:00 - 9:30 a.m. |
Welcome
and introduction by participants |
| 9:30
- 10:50 a.m. . |
Plenary
session 1: Reform and restructuring in the infrastructure
sectors This
first session will provide an overview of international
and regional trends in the reform of the infrastructure
sectors, and will assess what we have learned from the
last decade of privatization, re-regulation and the development
of markets for infrastructure services. |
| 10:50
- 11:10 a.m. |
Tea
|
| 11:10
- 12:30 p.m |
Plenary
session 2:
Regulation
in the context of economic reforms
The session
will begin with the issue of why regulation is required?
And will explain the need for bringing in the concept of
regulation in the infrastructure sectors. |
| 12:30
- 1:30 p.m. |
Lunch |
| 1:30
- 3:30 p.m. |
Plenary
session 3:Panel
Discussion on Issues and challenges to regulatory environment:
Stakeholder’s perspective
This
session draws upon experiences in looking at the special
challenges this poses for regulators, public and private
regulated companies operating in the infrastructure sectors,
to cope with the challenges of a regulatory environment.
Presentations will be followed by a panel discussion. This
will give participants a chance to gain various perspectives
on regulation. |
| 3:30
- 3:50 p.m |
Tea
|
| 3:50
- 5:00 p.m. |
Plenary
session 4: Group
discussion: Key issues in infrastructure reforms and regulation
in South Asia |
| 5:00
- 5:30 p.m. |
Plenary
session 5:
Overview
of the price-control review case study |
| |
| 22 October 2005 (Day
2 Saturday)
|
| 9:00
- 10:20 a.m. . |
Plenary
session 6: Introducing competition in infrastructure sectors
The
session will analyze special features of network industries
and how these features present challenges for introducing
competition. It will then examine selected examples to
illustrate the extent to which competition has been introduced
as well as the impact that this has had on prices, quality
of service, and expansion of the network. |
| 10:20
- 10:40 a.m. |
Tea
|
| 10:40
- 12:00 noon |
Plenary
session 7:The role
of the regulator in introducing competition
Competition
in network industries does not mean absence of regulation.
The role of regulator gets changed. The session will identify
issues/ areas where the regulator will be required to concentrate
for ensuring that rules of the game, as set, are compiled
with and competition is sustained. The session will also
discuss the role of the government, if any, in such scenarios.
|
| 12:00
- 1:30 p.m. |
Lunch |
| 1:30
- 2:50 p.m. |
Plenary
session 8:How
to run a price review
This
session will cover the procedural activities involved in
undertaking a price review, including interaction with regulated
companies, consumers, and the government, managing the media,
and anticipating reactions to the results of the price review,
including appeal. |
| 2:50
- 3:10 p.m |
Tea
|
| 3:10
- 4:30 p.m. |
Plenary
session 9: Issues
in a price review |
| 4:30
- 6:00 p.m. |
Plenary
session 10:
Introduction
to case studies |
| |
| 23 October 2005 (Day
3 Sunday) |
| 9:00
- 10:20 a.m. |
Plenary
session 11: Price regulation – price caps and incentives
The
session will provide the rationale for price/revenue cap
approaches, and their use and evolution within the UK. |
| 10:20
- 10:40 a.m. |
Tea
|
| 10:40
- 12:00 noon |
Plenary
session 12:
Other techniques
for price regulation
The session
will review alternative methods of setting prices covering
rate of return, sliding scale, hybrid approaches, and other
techniques, which relate prices to measures of performance.
The session will also present applied examples of multi-year
price controls and related issues. |
| 12:00
- 1:30 p.m. |
Lunch |
| 1:30
- 2:50 p.m. |
Plenary
session 13:Measuring
efficiency and performance
The session
will provide an overview of how regulators can use efficiency
measures as well as review some of the techniques used for
benchmarking and calculating efficiency and the special
problems likely to be encountered in the South Asia region.
|
| 2:50
- 3:10 p.m |
Tea
|
| 3:10
- 4:30 p.m. |
Plenary
session 14: Regulatory
treatment of investment
The
success of regulatory agencies in providing a framework
conducive for investments is increasingly a focus of concern.
The importance of fixed costs in the overall cost structure
of network utilities means that the appropriate treatment
of investment is important for consumers. But in most
network utilities it is difficult, if not impossible,
to precisely predict investment requirements several years
forward. This session looks at the detailed mechanisms
by which regulators have tried to review investment decisions
and incorporate them in a utility's asset base and provides
a framework for different approaches based on the particular
conditions prevailing |
| 4:30
- 6:00 p.m. |
Price
control case study |
| |
|
24 October 2005 (Day4
Monday>) |
| 9:00
- 10:20 a.m. |
Plenary
session 15: Financial techniques – accounting approaches
and asset valuation The
session will look at key building blocks in the financial
analysis underpinning price regulation. It will cover
the treatment of depreciation and other key accounting
issues, and will also look at different techniques employed
for asset evaluation. |
| 10:20
- 10:40 a.m. |
Tea
|
| 10:40
- 12:00 noon |
Plenary
session 16: cost of capital – common problems and mistakes in developing
regulatory regimes
The session
will look into some of the common problems and mistakes
that are faced in developing regulatory regimes with specific
emphasis to the gas, electricity and telecom sectors across
Pakistan, Abu Dhabi and Bahrain. |
| 12:00
- 1:30 p.m. |
Lunch |
| 1:30
- 2:50 p.m. |
Plenary
session 17:USO
(universal service obligation) and incentives for service
expansion
The session
will cover some of the main conceptual and practical issues
involved in addressing incentives for system expansion administration
of USO Fund. |
| 2:50
- 3:10 p.m |
Tea
|
| 3:10
- 5:00 p.m. |
Plenary
session 18: Decentralized
and small-scale service providers: Panel discussion
The
infrastructure in rural areas in developing countries
is generally not on par with the infrastructure available
in urban areas. Creating profitable market strategies
for the poor is also a challenge. This session will present
an overview of international experiences of decentralized
and small-scale service providers and focus on several
examples from South Asia in transforming the rural lifestyles,
and encouraging entrepreneurships with an orientation
to improving the accessibility of services and knowledge
resources (health, education, employment, business, etc.)
for rural people. |
| 5:00
- 6:00 p.m. |
Price
control case study |
|
25 October 2005 Off (Day 5 Tuesday )
|
| 26
October 2005 (Day 6 Wednesday ) |
| 9:00
- 10:20 a.m. |
Sectoral
breakout 1
Regulation and restructuring: international experience
Electricity/Telecom/
Gas/Transport
|
| 10:20
- 10:40 a.m. |
Tea
/ Coffee |
| 10.40
a.m. - 12.00 noon |
Sectoral
breakout 2
Regulation and restructuring: regional experience
Electricity/Telecom/
Gas/Transport |
| 12:00
noon - 1:30 p.m. |
Lunch |
| 1:30
- 2:50 p.m.. |
Sectoral
breakout 3
Competition: international experience
Electricity/Telecom/Gas/Transport
|
| 2:50
- 3:10 p.m. |
Tea
/ Coffee |
| 3:10
- 4:30 p.m. |
Sectoral
breakout 4
Competition: regional experience
Electricity/Telecom/Gas/Transport |
| 4:30
- 6:00 p.m. |
Group
work
|
| 27
October 2005 (Day 7 Thursday ) |
| 9:00
- 10:20 a.m. |
Sectoral
breakout 5:Pricing:
international experience
Electricity/Telecom/
Gas/Transport
|
| 10:20
- 10:40 a.m. |
Tea
/ Coffee |
| 10.40
a.m. - 12.00 noon |
Sectoral
breakout 6: Pricing:
regional experience
Electricity/Telecom/
Gas/Transport
|
| 12:00
noon - 1:30 p.m. |
Lunch |
| 1:30
- 2:50 p.m.. |
Plenary
session 19: Regional
approaches to quality of service
The
session will review experiences on performance standards
alongside the price regulation being addressed in the
South Asian region. Experiences and challenges in implementation
of QOS in the region (inter country, inter sector) will
be presented. The session will also highlight the work
on QOS as regards electricity sector focusing on their
linkages with other regulatory instruments, design issues,
implementation modalities, nature of details, and pros
and cons against lessons learned and challenges in the
region.
|
| 2:50
- 3:10 p.m. |
Tea
/ Coffee |
| 3:10
- 4:30 p.m. |
Plenary
session 20: Establishing
regulatory legitimacy
The
session will look at the challenges that the new regulatory
agencies face to their regulatory legitimacy, and the
tactics they adopt to overcome these challenges. The session
will also cover the concept and experience of “regulation
by contract”. |
| 4:30
- 5:15 p.m. |
Special
Presentation: DERC Presentation on ‘Delhi Privatization
Experience’ |
| 5:15
- 6:30 p.m. |
Group
work on price control case study
|
| |
| 28 October 2005 (Day8
Friday) |
| 9:00
- 10:20 a.m. |
Plenary
session 21: Stakeholder consultation: regulatory processes
in the South Asian Region The
session will review the different methodologies adopted
in the region for the stakeholder consultation process
and their effectiveness. Selected examples will be presented
from the South Asian region. |
| 10:20
- 10:40 a.m. |
Tea
|
| 10:40
- 12:00 noon |
Plenary
session 22:
Performance
evaluation of regulatory systems and agencies
With
the introduction of the system of independent regulation
in developed and developing countries, and with the large
number of regulatory agencies already in place, systematic
evaluation of desired outcomes and activities become necessary.
This would help in managing and improving services to their
stakeholders and to assist them in providing accountability
to citizens and hence the regulatory system. This session
will present a prototype of performance evaluation techniques
based on the experience of Brazil and will discuss its suitability
in the South Asian context. |
| 12:00
- 1:30 p.m. |
Lunch |
| 1:30
- 2:50 p.m. |
Plenary
session 23:Reforms
and Regulation – What are we missing? Indian Experience
|
| 2:50
- 3:10 p.m |
Tea
|
| 3:10
- 4:30 p.m. |
Plenary
session 24: Regulatory
Risk and Regulatory Commitment
The
session will examine investor perceptions of regulatory
risk, how these may vary between countries, and how regulatory
discretion can and has been reduced. Other related issues
faced by regulators in the region will also be discussed. |
| 4:30
- 6:00 p.m. |
Group
work on price control case study |
| 29
October 2005 (Day 9 Saturday ) |
| 8:30
- 10:15 a.m. |
Price
control review: regulatory hearing
|
| 10:15
- 10:30 a.m. |
Tea
/ Coffee |
| 10.30
a.m. - 12.00 noon |
Price
control review: regulatory hearing and course roundup |
| 12:00
noon - 1:30 p.m. |
Lunch |
For
further details, please contact
Ms Anjali Garg
TERI
Darbari Seth Block
IHC Complex, Lodhi Road
New Delhi – 110 003
India
Tel: 2468 2100 or 2468 2111.
Fax: 2468 2144 or 2468 2145
India +91 · Delhi (0) 11
E-mail: agarg@teri.res.in |
|