Results of the Audit over Activities of the Committee for Regulation of Natural Monopolies under the Ministry of National Economy of the Republic of Kazakhstan Reviewed at the Supreme Audit Chamber

At a meeting of the Supreme Audit Chamber of the Republic of Kazakhstan, the results of the performance audit over activities of the Committee for Regulation of Natural Monopolies (CRNM) under the Ministry of National Economy of the Republic of Kazakhstan were reviewed.

A natural monopoly arises when it is impossible or economically impractical to create competitive conditions in a particular market. This is due to the technological characteristics of the production of certain goods and services. These include transportation of oil and gas through main pipelines, railway transportation, transmission and distribution of electricity, etc.

The key task of the CRNM is to ensure a balance of interests of consumers, the state, and entities of natural monopolies (ENMs). At the same time, the conducted audit revealed that certain functions and practices of the Committee and its regional departments require further refinement and improvement.

In particular, it is necessary to strengthen control over the maintenance and updating of the State Register of SNMs. According to the law, inclusion in and exclusion from the register is carried out upon the application of the entity itself. However, this creates conditions for the presence in the register of companies that have ceased operations.

Certain shortcomings were also noted in the implementation of the “Tariff in Exchange for Investment” program. Despite the fact that all its components were implemented, the scaling of the program was carried out unevenly, which means that the level of involvement of ENMs could have been higher. As a result, the focus gradually shifted toward supporting projects that had already been launched.

The CRNM needs to conduct a thorough analysis to ensure the evenness and balance of the burden on consumers resulting from tariff increases.

To eliminate procedural violations and systemic deficiencies identified during the audit, the Government and authorized state bodies were provided with the necessary recommendations and instructions.