Abstract
Introduction
This report contains up-dated information on deregulation and privatisation of
the energy and water industries, each sector up-dated to 2008. Progress
continues in deregulating most markets around the world but it is a mixed
picture, with some successes but generally the situation in 2008 is less
satisfactory than initially hoped for. In July 2007, the final stage of market
opening according to the EU Directive was reached. Almost all of the original
EU 15 countries and most of the new entrants opened their markets 100%. As a
region, only the EU is moving systematically in a co-ordinated manner, while
other markets are developing new structures on an individual country basis.
The EU Commission has been monitoring progress and in February 2006 published
a critical report drawing attention to a number of aspects in which progress
towards liberalisation is considered unsatisfactory and new rules are being
implemented against strong resistance from the European Energy Giants. It may
be many years before the optimum situation is reached. This comes at a time
when the European energy sector is at a crossroads, with ever increasing
demand and some uncertainties about supply, especially from Russia.
A development in the global market in recent years has seen the emergence of a
second generation of global investors, regional companies looking outside
their immediate sphere of influence. The first generation of global investors
were European and American companies, notably E.ON, RWE, Suez, Vivendi,
Endesa, Iberdrola, EDF, Enel, Tracetebel and other large European companies.
The American investors included TXU, AES, PSEG, AEP, CMS, Duke, Mirant and
others. Many of the American companies have withdrawn or reduced their
overseas investment. Among the new regional groupings are several large Asian
companies, which are now looking outside their national markets.
There has also been a trend for utilities to withdraw from non-core business;
for example, RWE is in the process of divesting its water interests, which
included Thames Water, now the third largest global water company, to
concentrate on its energy business. There has also been an increasing number
of reversals of privatisation or concession contracts, especially in Latin
America and Africa, where there have been some high profile cancellations of
private management contracts in the water and waste sector and some criticism
of privatised industry in the electricity sector. These have mostly focused on
price rises.
141 PPI projects have been cancelled or were in distress, totalling $46.4
billion by the end of 2006. 62% of the cancelled investment ($28,659 million)
was for projects in Latin America and 27% ($12.5 million) in Asia Pacific. The
cancellations have not all been one sided, they have been instigated either by
governments, by popular opposition or by the concessionaires. There is an
escalating degree of opposition, mainly regarding privatisation in the
developing countries.
Outline of the report
- The Multi-Utility Deregulation Report outlines the progress of market
deregulation and privatisation in every continent and the situation of each of
the countries
- The report provides an essential guide for those needing to understand the
progress, the changes that have occurred and the future impact of deregulation
and privatisation in the global energy and water markets
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