Colombia - Regulatory Reform Project (Formerly listed as Regulatory Reform for Private Infrastructure Provision Technical Assistance Project)

Report No. PIC3535 Project Name Colombia-Regulatory Reform Project Region Latin America and the Caribbean Sector Public Sector Project ID COPA40102 Borrower Republic of Colombia Beneficiaries Ministry of Finance and Public Credit (MHCP) National Department of Planning (DNP) Bank Financing Proposed US$12.5 million Financing Plan IBRD: US$ 12.5 million IDB: US$ 12.5 million Government: US$ 8 million Total: US$ 33 million Appraisal Date November 13, 1996 Board Date March 1996 A. Country and Sector Background 1. Prior to 1989, the public sector was the primary provider of infrastructure, transport services, telecommunications, and utilities to the private sector. The high costs and low quality of services provided by these entities have been a bottleneck for private sector development. Infrastructure bottlenecks and inefficient services contributed to the high cost of doing business identified in a recent PSA, reduced economic growth, and contributed to raising input costs. Since then, the GOC monopolies in shipping, railways, airlines, and ports have been eliminated by allowing private sector entry, or by reorganizing or liquidating public monopolies. With the deregulation programs underway, the role of Government has shifted from a direct provider to a regulator in the liberalized sectors. However, the provision of physical infrastructure still remains largely in public hands, including utilities owned by municipalities. 2. GOC committed itself to expand and modernize the country