utility regulation oversight in brazil: the role of tcu
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INTOSAI Working Group on the Audit of Privatisation 11th meeting, Sófia, June 2004. Utility Regulation Oversight in Brazil: the role of TCU. Brazilian Court of Audit (TCU) -> Brazilian SAI www.tcu.gov.br. Utility Regulation Oversight in Brazil Presentation Contents. Privatisation oversight - PowerPoint PPT PresentationTRANSCRIPT
Utility Regulation Oversight in Brazil: the role of TCU
Utility Regulation Oversight in Brazil: the role of TCU
Brazilian Court of Audit (TCU) -> Brazilian SAI www.tcu.gov.br
INTOSAI Working Group on the Audit of Privatisation
11th meeting, Sófia, June 2004.
Utility Regulation Oversight in BrazilPresentation Contents
Utility Regulation Oversight in BrazilPresentation Contents
Privatisation oversight Regulatory agencies oversight Results of TCU actions Projects in progress Economic regulation and social inequality - the access to
electricity audit
Privatisation in BrazilPrivatisation in Brazil
From 1991 to date: 69 federal state owned enterprises were privatised; new concessions were granted in the sectors of energy,
telecommunications, road and railways.
Privatisation´s resultPrivatisation´s result
59.559
11.326
Stock sold
Debttransferred
US$ millions
Total70.885Total
70.885
PrivatisationOversight by TCU (Norm TCU nº 27/1998)
PrivatisationOversight by TCU (Norm TCU nº 27/1998)
Previous and concomitant control: TCU takes part at least twice in any process:
before the auction, to analyse privatisation rules and the minimum sale´s price;
after the privatisation, to verify the signed contracts and government revenues.
Anytime, if irregularities are found, TCU can command a caution measure in order to set the process right.
Privatisation oversight by TCUMain resultsPrivatisation oversight by TCUMain results
Minimum sale´s price review for several companies (EDN, IRB, BANESPA, BEG)
increment over US$ 700 millions
Prospects pre-qualification review More competitiveness
Changes in the sale´s rules Greater transparency
Telecommunication
1997
Electricity
1996
Transport
2001
Oil and gas
1997
Utility Regulation in BrazilThe regulatory agenciesUtility Regulation in BrazilThe regulatory agencies
ANEEL
ANATEL
ANP
ANTAQ & ANTT
Utility Regulation Oversight by TCUStructure and actingUtility Regulation Oversight by TCUStructure and acting
Specialized unit: SEFID (since 1998) staff: 22 auditors
Control practices: Concomitant control of new concessions (since 1995) Performance audit in the agencies (since 1999) Audit, evaluation and review of regulatory processes
(since 2000) Concomitant control of the periodic tariff review in
electricity distribution sector (since 2002)
Regulators´control in Brazil Main resultsRegulators´control in Brazil Main results
Improvement on the minimum price calculation method telephone, cable tv and hydroelectric power station
concessions;
Roads toll reduction: inclusion of undue taxes, overestimation of investments
and not consideration of additional revenue; Better treatment of environment issues in the oil and gas
sector; Identification of unclear definition of the duties of
ministries and regulatory agencies.
Utility Regulation Oversight in Brazil Projects in progressUtility Regulation Oversight in Brazil Projects in progress
We have two improvement projects going on: Modernisation of public services regulation control.
Supported by IDB (2002 - 2006) CERDS - Oversight Improvement with focus in the Social
Inequality Reduction. Supported by DFID/UK (2002-2006)
Utility Regulation Oversight in Brazil Projects in progressUtility Regulation Oversight in Brazil Projects in progress
Modernisation of public services regulation control.
Mapping and development of control´s practices CECR - Centre for the Study of Utility Regulation
Oversight Corporative education Institutional communication plan
Oversight improvement with focus in the social inequality reductionOversight improvement with focus in the social inequality reduction
Main audits Universalisation in the access to electricity Universalisation in the access to Telecommunications
(ongoing)
Interstate passengers road transport (ongoing)
Audit about universalisation in the access to electricity
Audit about universalisation in the access to electricity
2003
Universalisation in the access to electricity Audit issuesUniversalisation in the access to electricity Audit issues
Audit issue 1Who is not connected to the electricity distribution network in Brazil?
Audit issue 2Are the criteria used to choose the beneficiaries suitable?
Audit issue 1Who is not connected to the electricity distribution network in Brazil?Audit issue 1Who is not connected to the electricity distribution network in Brazil?
Brazil is a south American country
Audit issue 1Who is not connected to the electricity distribution network in Brazil?Audit issue 1Who is not connected to the electricity distribution network in Brazil?
Brazil is a federation of 27
states.
The states are divided in
municipal districts
Audit issue 1Who is not connected to the electricity distribution network in Brazil?Audit issue 1Who is not connected to the electricity distribution network in Brazil?
There are 5.561 municipal districts
in Brazil
Audit issue 1Who is not connected to the electricity distribution network in Brazil?Audit issue 1Who is not connected to the electricity distribution network in Brazil?
The electrical exclusion have been
analysed for each municipal district.
0 to 10 % of population is not connected
10 to 25 % of population is not connected
25 to 100 % of population is not connected
Audit issue 2Are the criteria used to choose the beneficiaries suitable?Audit issue 2Are the criteria used to choose the beneficiaries suitable?
Policy objective: subsidise low income households.
Policy implementation premise: households with low electricity consumption imply low
income households.
TCU investigated if: Household electricity consumption is correlated with
household per capita income.
Audit issue 2Are the criteria used to choose the beneficiaries suitable?Audit issue 2Are the criteria used to choose the beneficiaries suitable?
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Audit issue 2Are the criteria used to choose the beneficiaries suitable?Audit issue 2Are the criteria used to choose the beneficiaries suitable?
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Households that deserve subsidy (income criterion)
Audit issue 2Are the criteria used to choose the beneficiaries suitable?Audit issue 2Are the criteria used to choose the beneficiaries suitable?
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Income per capita (living wage)
Households that deserve subsidy (income criterion)
Households that receive subsidy (consumption criterion)
Audit issue 2Are the criteria used to choose the beneficiaries suitable?Audit issue 2Are the criteria used to choose the beneficiaries suitable?
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Income per capita (living wage)
Households that deserve subsidy (income criterion)
Households that receive subsidy (consumption criterion)
Households that receive reduced subsidy (social program database criterion)
Audit issue 2Are the criteria used to choose the beneficiaries suitable?Audit issue 2Are the criteria used to choose the beneficiaries suitable?
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Income per capita (living wage)
Households that deserve but don´t receive subsidy (low efficacy)
Households that receive and deserve subsidy(correct)
Households that receive but don´t deserve subsidy (inefficiency)
Universalisation in the access to electricityConclusionUniversalisation in the access to electricityConclusion
The criteria defined in the Brazilian law are not suitable, because:
high income consumers that have a low consumption receive subsidy (inefficiency);
an expressive amount of low income consumers don´t receive subsidy (low effectiveness);
low income consumers subsidise high income consumers (regressivity).
Universalisation in the access to electricity Main recommendationsUniversalisation in the access to electricity Main recommendations
use supplementary criteria to fit the households that must receive subsidy;
implement subsidy in a national extent due to regional inequalities, there is a risk of overcharging
households in the poorest States.
improvement on the delivery of public services.
Projects in progress Expected impacts Projects in progress Expected impacts
Improvement on the utility regulation oversight, including regulatory agencies and other areas of government,
systemic view of the regulatory activity, interaction with consumer councils, increase of transparency, improvement on the regulatory activity.
Brazilian Court of Audit (TCU) -> Brazilian SAI www.tcu.gov.br
email: [email protected]
Brazilian Court of Audit (TCU) -> Brazilian SAI www.tcu.gov.br
email: [email protected]
Thanks!!Marcelo Sobreiro Maciel
email: [email protected]
Brazilian Court of Audit (TCU) -> Brazilian SAI www.tcu.gov.br
email: [email protected]
Brazilian Court of Audit (TCU) -> Brazilian SAI www.tcu.gov.br
email: [email protected]
INTOSAI Working Group on the Audit of Privatisation
11th meeting, Sófia, June 2004.