Reuters-ASEAN supports stronger reg

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Subject: Reuters-ASEAN supports stronger regulation in power sector 

ASEAN supports stronger regulation in power sector
03:55 a.m. Apr 23, 1999 Eastern
SINGAPORE, April 23 (Reuters) - ASEAN supports stronger regulation in Asia's
power sector to lure foreign investment and spur competition as the region
develops, ASEAN officials said on Friday.

``(We) supported the development of regulatory frameworks that promote
greater competition and facilitate foreign direct investment into the
region's power sectors,'' said Boey Tak Hap, head of the Singapore
delegation, told a news conference.

The group also agreed to increase the number of projects linked between
ASEAN nations to 14 from 10.

The new projects -- which include the sharing of technology and research --
would link Thailand-Myanmar, Vietnam-Cambodia, Laos-Cambodia and
Thailand-Cambodia.

Boey, president and chief executive of Singapore Power, said the ASEAN
meeting noted that member countries were moving ahead on deregulation and
having utility assets privatised.

The trend was toward establishing electricity tariffs at market rates to
reflect the true costs of services.

But he said separate mechanisms could be developed to address the issue of
subsidies to certain groups of customers.

``In Singapore, the exercise to divest some power plants is ongoing...on
ownership structure, the thinking up to now is that still the majority will
be owned by a Singapore consortium.''

Singapore Power, the island state's electricity monopoly, would start
divesting its power plants by 2001 in line with the government's moves to
have four separate power entities operating under private and public
ownership.

Officials said Malaysia and the Philippines have started divesting the
generation parts of their utility sectors while other countries were
re-examining independent power projects due to either over-capacity or
shortages.

Experts have said that countries such as Vietnam, Laos and Cambodia had
capacity shortages but lacked adequate regulatory frameworks to attract
foreign investments.

The meeting agreed to hold a workshop in future on electricity sector
deregulation, restructuring and privatisation.

Meanwhile, ASEAN officials said electricity demand had increased this year
in some countries, which signalled economies were on the road to recovery
after Asia's financial crisis.

``Over the last one month, we have had very high demand...,'' Fuad Jaafar,
Senior Vice President of Malaysia's Tenaga Nasional Berhad (TENA.KL) said.

``Based on general analysis, companies are resuming production or increasing
manufacturing,'' he added.

Indonesian officials said demand lat month rose to about 10,000 megawatt per
day, levels seen in 1997.

The three-day 15th meeting of the heads of ASEAN Power Utilities/Authorities
was attended by officials from eight of the nine member countries -- Brunei,
Indonesia, Laos, Malaysia, the Philippines, Singapore, Thailand and Vietnam,

Cambodian officials attended as observers.