OSITRAN s Institutional Framework

Transcription

1 2008/SOM3/EC/SEM/009 Agenda Item: 3 OSITRAN s Institutional Framework Submitted by: Peru Seminar on Best Practices in Regulation and Promotion of Efficiency in Transport Infrastructure Facilities Lima, Peru August 2008

2 SEMINAR ON BEST PRACTICES IN REGULATION AND PROMOTION OF EFFICIENCY IN TRANSPORT INFRASTRUCTURE FACILITIES OSITRAN S INSTITUTIONAL FRAMEWORK JUAN CARLOS ZEVALLOS UGARTE CHAIR OF THE BOARD OF DIRECTORS August 15, 2008 Contents 1. Background of regulatory reform in Peru 2. Concession Process for the Transport Infrastructure 3. OSITRAN's role as Regulator of the Investment in Transport Infrastructure 4. Challenges, achievements and results 5. Final considerations 1

3 1. BACKGROUND OF THE REGULATORY REFORM IN PERU What happened before the 90 s? The Government was in charge of the provision of public services Public Services in crisis: Inefficiency in the provision of goods and services Ambiguous objectives Political intervention Decapitalized investment resources Absence of regulatory and competition agencies Peru was considered a high-risk country 2

4 What happened after the 90 s? Aggressive institutional reforms, also on regulatory issues New rules for the State: It could not be both player and referee Private participation process Law of Foreign Investment Promotion: no discrimination for foreign and local capitals Law for the promotion of private investment in state companies Free market regime, private initiatives and investment were promoted and guaranteed Those reforms were written into the new Political Constitution in addition, legal framework was implemented for regulatory bodies Elimination of monopolistic practices and anticompetitive restrictions: creation of the Competition Agency (INDECOPI) The Telecommunication Law allowed private investment and free competition Promotion of investment in Energy (electricity and hydrocarbons), electricity privatization (concessions), issuance of Antitrust Act on Electricity Sector Regulatory agencies were created to regulate public utilities: OSIPTEL: telecommunications OSINERGMIN: energy SUNASS: sanitary OSITRAN: transport infrastructure 3

5 TIME-LINE: REGULATORY REFORM EVENTS ( ) TRANSPORT CONCESSION: AREQUIPA MATARANI HIGHWAY TELECOM LAW PRIVATIZATION ELECTRICAL POWER SECTOR LAW OF ELECTRICAL POWER CONCESSION PRIVATIZATION TELECOM NEW GOVERNMENT CONCESSION PROCESS FOR THE TRANSPORT INFRASTRUCTURE 4

6 CONCESSION PROCESS FOR TRANSPORT INFRASTRUCTURE Sectorial Regulation MTC: Contracting Authority Represents the State in the Contract of Concession. It is a party in the contract Proinversión: Bidding Institution Designs concession contracts, in coordination with the Contracting Authority and carries out the bidding process. Economic Regulation OSITRAN: Regulator Supervises fulfillment of concession contracts. TYPES OF REGULATION Economic Regulation: Tariffs and Access regulation to users of transport infrastructure. It is under the Regulator s scope. Sectorial Regulation: licenses, authorizations, security and environmental laws. It is under the scope of the Ministry of Transport and Communications. 5

7 3. OSITRAN'S ROLE AS REGULATOR OF THE INVESTMENT IN TRANSPORT INFRASTRUCTURE OSITRAN s Role State Supervise the fulfillment of Concession contracts Ensure efficient tariffs Regulator Operators Limit the exercise of Monopolistic Power Users OSITRAN looks to protect impartially and objectively the interests of the State, the operators and users/consumers 6

8 Specific Goals To guarantee users` access to the infrastructure. To guarantee quality and continuity of the service. To watch for the fulfillment of concession contracts To guarantee balance among users, concessionaires and the State. To facilitate the development, modernization and efficient use of the service To promote competition in the services supply. OSITRAN s Institutional Framework (I) Regulatory model: Sectorial: one regulatory body for transport infrastructure facilities Multimodal approach (for ports, airports, railways and highways) Transversal specialization: know-how generates economies of scope (e.g. regulatory mechanism in seaports can be transfered to airports). Board of Directors Designation Mechanism Strengths Public Selection Criteria Strict Requirements Different term of office from the Presidential one Weaknesss No full-time 7

9 OSITRAN s Institutional Framework (II) Technical and Economic Independence Transparency Pre-publication of preliminary norms Public Hearings Full disclosure of Tariff Studies User Councils in each type of infrastructure Accountability Governance Predictability Tariffs Rule Access Regime Regulatory Accountability Institutional Development Course on Transport Infrastructure (every summer) Journal of Transport Infrastructure Regulation (Vol.1 Nº1. July, 2008) Strategic Agreements (Universities, Research Centers, etc.) REGULATION MECHANISMS SECTOR NON-COMPETITIVE MARKET METHOD OF REGULATION Air Services Airport Facilities Price Cap (RPI - X) Seaport Services Seaport Facilities Price Cap (RPI - X) Railways Track Rate of Return Highways Road Rate of Return 8

10 OSITRAN`s PERFORMANCE Taking into consideration, a gap in infrastructure of around US$23 billion (Instituto Peruano de Economía, 2005), approx. 33% is transport infrastructure deficit (mainly in highways). In addition, logistic overcosts as a consequence of lack of transport infrastructure: US$ 400 million yearly (Universidad del Pacífico, 2005). Investment commitments according to Concession Contracts: US$ 3,4 billion. Until now, executed and recognized: US$ 1 billion (June,2008). Executed and recognized investment on transport infrastructure has grown in the last three years, as a consequence of more concessions Infrastructure jun-08 Highways 238,0 694,4 777,5 Airports 163,4 182,7 188,0 Seaports 7,3 7,3 14, Railways 52,4 53,2 69,5 Total 461,1 937, , , US$ million jun-08 Highways Airports Seaports Railways 9

11 However, concession contracts increase at a faster rate S u p e rv is io n A c tiv itie s years Años U S$ M illion er trim 2009 Accumulated compromised investment Number of contracts Núm e r o to ta l de con t r ato Supervision activities have increased dramatically in the last 5 years (fourfold) in order to fulfill contractual commitments. The number of contracts and accumulated compromised investment have increased also. It is necessary to enhance operative capacity of OSITRAN Highways 16% of the national highways is under concession (*): 4,022 Kms and US$ 1,689 million as agreed investment Source: MTC (2007). Paita Buenos Aires Piura Canchaque Yurimaguas Olmos Rioja Corral Quemado Tarapoto Pativilca Huacho Ancón Pucusana Cerro Azul Ica San Juan de Marcona Matarani Iñapari Pte. Inambari Urcos Azángaro Arequipa Ilo Puerto Maldonado Juliaca 10 Concessions CONCAR (1994) Arequipa- Matarani NORVIAL (2003) Ancón Huacho Pativilca COVIPERU (2005) Pucusana Cerro Azul - Ica IIRSA Norte S.A. (2005) Paita - Yurimaguas Interoceánica Sur S.A. (2005) Sector 2 Sector 3 Intersur S.A. (2005) Sector 4 Concesión Canchaque (2007) Bs As -Canchaque 183 km 222 km 955 km 300 km 403 km 306 km 78 km Consorcio Interoceánico Tramo 1 (2007) 763 km Sector 1 Concesionaria del Sur (2007) 814 km Sector 5 Total 4,022 km 10

12 Airports Chachapoyas Talara Tumbes Tarapoto Iquitos 2 Concessions International Airport Jorge Chávez (Lima), 2001 Regional Airports, 2006 Cajamarca Trujillo Anta Lima Pucallpa 11 regional airports belong to the First Group of Airports from North / East given in concession (Talara, Tumbes, Chachapoyas, Iquitos, Tarapoto, Pucallpa, Trujillo, Anta y Cajamarca). Agreed Investment in airports: US$ 1 billion. Seaports 2 Concessions Matarani Seaport, 1999 New Container Terminal - Callao, 2006 New Container Terminal begins operations in Callao Agreed Investment in seaports: US$ million. Matarani - Arequipa 11

13 Railways 2 Concessions - Central Railway FVCA (1999) - South East Railway - South Railway FETRANSA (1999) Pasco Accumulated investments: US$ 56.5 million. Callao Huancayo Machupicchu Cusco Supervision of 1,478 Kms of railways. Arequipa Puno Juliaca Matarani 4. CHALLENGES, ACHIEVEMENTS AND RESULTS 12

14 CHALLENGES (I) Estimated Investments for Incoming Concessions ( ): US$ 1,0 billion Ports Source: PROINVERSION CHALLENGES (II) Bottlenecks: dramatic increase in the number of concession contracts (issued by PROINVERSION and MTC) To increase Regulatory Culture in society (Journal of Transport Infrastructure Regulation). To improve regulation knowledge by key State Offices (The Judiciary, Contralor s Office). To enforce regulatory autonomy and enforce regulatory rule of law 13

15 ACHIEVEMENTS AND RESULTS Before Low rate of investment. Matarani seaport inefficient. Low productivity in railways. Low quality service in Lima s airport. No economic and social profitable investment in highway. After Matarani seaport increased productivity, investment and improved infrastructure. Improvement in quality service. More than US$ 1 billion of private investment. Profitable investment in highways economically and socially. High investment in infrastructure. Increased economics efficiency. Increased the number of private operators. Increased private investment. Tariff reduction in port infrastructure. 5. FINAL CONSIDERATIONS 14

16 Final considerations: One single agency for the transport sector (multimodal approach): specialization and economies of scope Each Board member is elected for a five-year term Commissioners are selected under high standards in a public participation process Elections timing independent of political terms Autonomy Transparency: public information, hearings, publications SEMINAR ON BEST PRACTICES IN REGULATION AND PROMOTION OF EFFICIENCY IN TRANSPORT INFRASTRUCTURE FACILITIES 15