Abstract
This chapter focuses on the types of regulatory systems like regulation by contract and autonomous regulatory institutions. While autonomous regulation is essential for private participation, developing countries struggle to establish a sustainable regulatory regime balancing the financial viability of the project with reasonable user fees. We also look at infrastructure regulatory institutions in India like Telecom Regulatory Authority of India (TRAI), Central and State Electricity Regulatory Commissions (CERC and SERCs), Tariff Authority for Major Ports (TAMP), and Airport Economic Regulatory Authority (AERA). Regulatory reforms in terms of objectives, autonomy, functions, and accountability are also discussed.
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Notes
- 1.
This is the case of a state government in India, which has come to power on the plank of cheaper electricity and is adamant at compromising regulatory processes to honor its promise.
- 2.
The incentives of the new entrant and the monopolist are likely to differ. For instance, the Department of Telecommunications had little incentive to give access to its infrastructure to new entrants who would compete with it in the downstream market. The absence of an independent and neutral regulatory body worsened the problem.
- 3.
This is also called the Averch–Johnson effect, or padding the rate base, and is a common criticism of rate of return regulation.
- 4.
This is the Aam Aadmi Party allegation against PPP power distribution companies in Delhi.
- 5.
Tremolet and Shah (2005). As quoted in Eberhard (2007a).
- 6.
Guasch (2004).
- 7.
A market failure is a situation where free markets fail to allocate resources efficiently. It is apparent in many real-life situations including failure to produce enough merit goods, such as education and health care, failure to control the manufacture and sale of sin goods like cigarettes and alcohol, etc.
- 8.
France is a written law (civil law) country. Everything should be specified in detail in the law there.
- 9.
The context of the observation was regulatory flip flops by Delhi Electricity Regulatory Commission whereby it gave conflicting recommendations about tariffs within a period of 6 months—from decrease tariffs to increase tariffs.
- 10.
In the airport sector in India, the airport company for Delhi Airport, Delhi International Airport Limited is 26% owned by Airports Authority of India, which is a majority public sector owned company.
- 11.
The regulator for the water sector in the UK.
- 12.
Giving the regulator the responsibility to publish the private party’s contract compliance information as well as the performance of government agencies involved in the sector would increase transparency and accountability.
- 13.
This could be done in a number of ways: for example, by allowing the public to interact with the utility in public in which the utility justifies tariff changes to the regulator.
- 14.
Eberhard (2007b).
- 15.
Freight rates are kept well above economic levels so that passenger fares may be kept low. The extent of cross-subsidization of passenger fares by freight rates has been estimated at Rs. 320 billion annually (which is a third of the budget of the Indian Railways) and needs to be rationalized.
- 16.
Secretariat of Infrastructure (2008).
- 17.
Reduction in regulatory burden is designed to bring about a balance between public interest and interests of persons. Burden is defined to include a financial cost, an administrative inconvenience, or obstacle to efficiency.
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Pratap, K.V., Chakrabarti, R. (2017). Infrastructure Regulation. In: Public-Private Partnerships in Infrastructure . India Studies in Business and Economics. Springer, Singapore. https://doi.org/10.1007/978-981-10-3355-1_8
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DOI: https://doi.org/10.1007/978-981-10-3355-1_8
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