Regulation of infrastructure in South Asia

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Jose19

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Regulation of infrastructure in South Asia

Till the early 1990s the infrastructure sectors in the South Asian region were dominated by the presence of the public sector in a near monopoly position. The Government, thus, apart from being a policy maker and a regulator of its Regulatory Affairs was also the owner of infrastructure service providers. In playing this multiplicity of roles, the Government was solely responsible for ensuring service provision to the populations of these countries while ensuring that the infrastructure service providers had enough investment resources for service expansion purposes.

From the early to the mid 1990s, the South Asian region saw a wave of Regulatory Affairs initiatives aimed towards attracting private investments in their infrastructure sectors. There was also a perception that if the enormous investment needs of the countries were to be met, foreign private capital would also have to be attracted into the countries. In a fairly short time it became apparent that such investments would not be forthcoming purely on the basis of policy pronouncements and that private investors were wary of the conflicts arising out of the multiplicity of roles played by Governments in the region.

It was largely as a result of these concerns that governments conceded to the establishment of ‘independent’ Regulatory Affairs commissions in key infrastructure sectors. This step, it was hoped, would also reduce the perception of political risk of investing in these sectors. This paper attempts to analyze the design characteristics of this new set of institutions and to decipher the underlying messages in the same.
 
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