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I.O.'S ORDER OF THE CHAIRMAN OF THE AGENCY OF THE REPUBLIC OF KAZAKHSTAN ON REGULATION OF NATURAL MONOPOLIES

of August 26, 2005 No. 255-OD

About approval of the Instruction for calculation of rate arrived to regulated base of the involved assets of subjects of the natural monopolies rendering public services to mail service

According to the subitem 3) of Item 1 of article 13 of the Law of the Republic of Kazakhstan "About natural monopolies" and the subitem 1) of Item 18 of the Regulations on the Agency of the Republic of Kazakhstan on regulation of natural monopolies approved by the order of the Government of the Republic of Kazakhstan of October 28, 2004 No. 1109, I ORDER:

1. Approve the enclosed Instruction for calculation of rate of profit on regulated base of the involved assets of subjects of the natural monopolies rendering public services to mail service.

2. To department on regulation and control in the sphere of telecommunications and air navigation (Aliyev I. Sh.) provide in the procedure established by the legislation state registration of this order in the Ministry of Justice of the Republic of Kazakhstan.

3. To department of administrative work and analysis of the Agency of the Republic of Kazakhstan on regulation of natural monopolies (Esirkepov E. O.) after state registration of this order:

To provide 1) in the procedure established by the legislation its publication in official mass media;

2) to bring it to the attention of structural divisions and territorial authorities of the Agency of the Republic of Kazakhstan on regulation of natural monopolies, local executive bodies of areas (the cities of republican value, the capital), informatization and communication Agencies of the Republic of Kazakhstan and Kazpochta joint-stock company.

4. To impose control of execution of this order on the vice-chairman of the Agency of the Republic of Kazakhstan on regulation of natural monopolies Nefedov A. P.

5. This order becomes effective from the date of its state registration in the Ministry of Justice of the Republic of Kazakhstan.

 

Acting Chairman

 

It is approved

Chairman of the Agency of the Republic

Kazakhstan on informatization and communication

of September 7, 2005

 

Approved by the order of the Acting Chairman of the Agency of the Republic of Kazakhstan on regulation of natural monopolies of August 26, 2005 No. 255-OD

The instruction for calculation of rate arrived to regulated base of the involved assets of subjects of the natural monopolies rendering public services to mail service

1. General provisions

1. This Instruction for calculation of rate arrived to regulated base of the involved assets of subjects of the natural monopolies rendering public services to mail service (further - the Instruction) is developed according to the Law of the Republic of Kazakhstan "About natural monopolies" and other regulatory legal acts.

2. The instruction disaggregates calculation of rate of profit on the regulated base of the involved assets which is part of rates (the prices, rates of charges) on public services of mail service.

3. The basic concepts applied in the Instruction:

competent authority - the central state body authorized on realization of state policy in the field of communication;

regulated base of the involved assets (further - RBZA) asset cost which are in property or on other legal causes at the subject of natural monopoly and used in case of production and (or) provision of regulated services of mail service;

equity - the capital belonging to participants or shareholders of the subject of natural monopoly rendering public services to mail service, including accumulated retained earnings and the reserve capital which is in addition paid and in addition unpaid capital;

rate arrived to RBZA - the regulation of operating profit corresponding to capital cost of the subject of natural monopoly rendering public services to mail service;

capital cost - the size characterizing remuneration rate on borrowed and own funds, reflecting the investment and other risks connected with implementation of the activities referred to spheres of natural monopoly;

authorized body - the central state body exercising control and regulation of activities in spheres of natural monopolies or regional (the cities of republican value, the capital) executive body within the established competence.

Other concepts and terms used in this Instruction are applied according to the legislation of the Republic of Kazakhstan.

2. Calculation of rate arrived to RBZA

4. Rate arrived to RBZA of the subject of natural monopoly rendering public services to mail service it is determined by method of weighted average capital cost:

Формула 1 к Приказу от 26.08.2005 года №255

d - profit rate;

We - equity, tenge;

Wd - the loan capital, tenge;

re - cost of equity;

rd - the cost of the loan capital.

5. Cost of equity of the subject of natural monopoly rendering public services to mail service is determined by summing of awards for the existing risks for this type of activity by formula:

Формула 2 к Приказу от 26.08.2005 года №255

where:

rf-risk-free rate;

rs-award for the risks characteristic of the sphere of mail service.

6. The risk-free rate is accepted equal flat yield of eurobonds of the Republic of Kazakhstan or bonds of the same circulation period, issued by the countries with the credit rating similar to the rating of the Republic of Kazakhstan determined based on data of National Bank of the Republic of Kazakhstan for date of application for approval of rate or for decision date about approval of rate at the initiative of authorized body.

7. Major factors of the risks connected with probability of loss of the income from rendering public services of mail service, characteristic of the sphere of mail service are:

1) prospects of development of the sphere of mail service;

2) condition of the involved assets;

3) change of rates for services of the high-level railway networks.

8. Risks assessment, characteristic of the sphere of mail service, determination of final level of risks and the size of awards for the final level of risks is performed by competent authority or the independent expert according to algorithm in appendix to the Instruction.

The final decision on the size of awards for the final level of risks on the basis of the conclusion of competent authority and/or the independent expert accepts authorized body.

9. The value assessment of borrowed funds is made by method of the provisional step-by-step and subsequent generalizing estimate in the form of weighted average on formula:

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