Sivavong Changkasiri

There are ample business opportunities in Asia. Considering the huge investment involved in the development of power generation and transmission project to meet the increasing demand in the future, the potential for private involvement is clear.

Privatization in power generation entails the adoption of one of two methods: either the sale of existing power plants, or the initiation of projects where the project sponsor designs, finances and constructs new facilities, in return the power utility's undertaking to purchase the power produced by the facility at a price set in accordance with an agreed formula.

As well-awared of power development to the prosperity of the countries, each government in Asia envisions the liberalizing and reforming the Electricity Supply Industry to reduce government burden in power sector. They welcome the private sector involvement and promote competition to achieve lower power tariffs and enhance levels of customer service. The countries moving ahead with electricity industry reform are Indonesia, Korea, Malaysia, Singapore, Philippines, China and Thailand. They announce their policies for competitive bidding market through a power pool and privatization of their generation assets.

In 1995, the Singapore Government decided to separate, under the new industry structure, the generation, transmission and supply function. While transmission and distribution business remains a natural monopoly, electricity generation and supply business are open to competition. After addition of more players in electricity generation market, Singapore's Power Pool commenced its operation in 1998.

The Philippines
The Philippines congress is in the process of passing the enabling law for the power sector restructuring that the Department of Energy has been pursuing. Initially, the National Power Corporation's generation assets will be sold to new generating companies to introduce competition..

Moreover, China is currently in preparation for establishment of power pool; the pilot projects are planned to be implemented in Shanghai, Chantung and Chue Chiang in 2001.

Meanwhile, Indonesia power sector policy is obvious to set up power pool for bulk supply.

The Malaysia Government plan envisages the separation of Tenaga National Berhad into generation and transmission companies including power pool establishment.

Japan and India
Japan and India are carefully considering their power reform approach.

The Korea Government has encouraged foreign direct investment and privatization of state-owned public enterprises. Based on the restructuring models of various countries, the Korean Electricity Industry Restructuring Committee has developed short-run initiatives by firstly splitting up the power generation sector of Korea Electric Power Corporation into several power generation companies to introduce competition and secondly by promoting efficiency by cost reduction and gradual privatization of the split-up power generation companies for long-term initiatives. Also, power distribution sector will be split into several power distribution companies to introduce competition in the wholesale and retail sectors.

For Thailand, the initial reforms centered on the generation sub-sector and included the introduction of the Small Power Producer Program, which placed a high priority on the use of renewable energy resources, the creation of the Electricity Generating Company and the Independent Power Producer Program. In May 1998, the Thai Government issued a policy statement for the privatization of the energy sector. This document set out a clear direction for the future reform of the generation sub-sector involving the divestiture of all generation from the Electricity Generating Authority of Thailand and its transformation into a transmission company.