While the draft retains the concept that everything that has to do with power generation, transmission and trade should be a state monopoly, it also allows the authorities to grant licences to private investors to engage in the electricity business.
Large projects (those generating over 30MW) are reserved for Union management, whereas mid-sized (10MW to 30MW) and small-scale (up to 10MW) projects are to be implemented by the states, regions, self-administered zones and self-administered divisions with prior approval from the “relevant” union ministry.
The draft explicitly allows foreign participation in large projects, yet It is silent as to whether foreigners may engage in small- and mid-sized electricity businesses.
The licensing authority for large-scale electricity business is the relevant union ministry. Licences for small- and mid-sized businesses are granted by the government of the respective region or state or the leading body of the respective self-administered zone or division.
The draft states that “the licence-holder shall, upon expiry of the permitted term, transfer the project to the concerned party in accordance with the agreement or the regulations in place at the time of receiving the licence”. Presently, power-plant projects involving private investors are largely realised through BOT structures – meaning build-operate-transfer, in which private sector looks after all stages of the process – and this wording suggests that this policy will continue into the foreseeable future.
The tariff rates for electric power are to be set by the relevant Union ministry with the consent of the Union government. Regional governments have the right to set their own tariff rates for electricity that is under their management and not taken from the national grid. According to the draft, the rates should be “sufficiently high to cover investment costs”.
The draft, if passed into law, will create an “electricity regulatory commission” at Union level which will be charged with writing the national electricity policy, recommending specific actions on the basis of a comparison of the national electricity sector with international standards and creating an inspection team to monitor whether the production, import, export, distribution and use of electrical appliances is done in conformity with the norms.
The relationship between the inspection team formed by the electricity regulatory commission and the “chief inspector” and the inspectors appointed by the relevant Union ministry is not entirely clear.
The chief inspector and inspectors are also charged with monitoring the safety of electrical appliances. Furthermore, they are to monitor the compliance of licence-holders with rules and regulations.
If passed into law, the draft will allow licensing authorities to take administrative actions against non-compliant licence-holders.
Wint Thandar Oo is Partner of Polastri Wint & Partners and U Tin Sein is senior associate.
source: The Myanmar Times
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