Infrastructure: Regulators need more teeth, says study
10 September 2012
Business Day Live (South Africa): INDEPENDENT regulators of economic infrastructure should be able to penalise anticompetitive behaviour by firms and state-owned enterprises, many of which are monopolies, the Development Bank of Southern Africa says in a report to be published this week.
The State of Infrastructure Report 2012 says giving regulators, including National Energy Regulator of SA and the National Ports Authority, the power to impose sanctions "must be a policy priority". It further says many of SA’s regulators are ineffective.
In infrastructure sectors where there are no regulators, such as rail and water, these should be established with urgency.
The bank’s report provides an in-depth analysis of the state of the six network industries — rail, ports, roads, electricity, water and telecommunications — and the challenges they face. The report’s key concerns and conclusions focus on the lack of a clear governance framework for developing infrastructure.
Poor governance, says the report, has implications for the sequencing of financing, pricing for consumers, efficient price recovery by the entities and the proper costing of the entire life span of what gets built.