New ICE Reform Bill Ready For Rebate, President Arias Says
Costa Rica's President Oscar Arias is ready to send to the legislative assembly his amended version of the former government's bill outlining reform measures for state telecommunications monopoly Instituto Costarricense de Electricidad (ICE), the Spanish language daily La Nación reported.

The bill is designed to prepare ICE for partial liberalization of the sector and Arias confirmed that the measures include privatization of ICE, a move also planned for the national insurance agency INS.

Telecoms liberalization is an element in the Costa Rican component of the Tratado Libre de Comercio (TLC) -  Central American Free Trade Agreement (CAFTA) - also encompassing El Salvador, Guatemala, Honduras, Nicaragua and the Dominican Republic.

In the case of Costa Rica it is partial liberalization, limited to internet and private networks business liberalization in 2006 and mobile telephony in 2007.

US and Costa Rican parties completed CAFTA negotiations in 2004 but the agreement has yet to be ratified by the legislative assembly, partly because Costa Rica must first pass the ICE reform as well as a new general telecoms law that paves the way for sector liberalization.

Costa Rica and the Dominican Republic are the only countries yet to ratify the agreement. Arias said he expects this to occur in December, La Nación reported.

Exporters back the government in its support for the CAFTA but 60% of the country is against it, particularly opposition parties, the Roman Catholic Church and unions.

Given the delays that have affected the CAFTA the government decided earlier this month to make liberalization part of the ICE reform bill rather than part of the new general telecoms law.

Prior to this decision there was a risk that the ICE reform bill would be passed in vain if the liberalization bill or the CAFTA subsequently fell through, independent daily Tribuna Democrática quoted a government source as saying.

"The new [reform and liberalization] bill will open the market with or without the CAFTA," the source said.

The source criticized the bill because it does not free ICE of the obligation to seek government authorization for going into debt to finance major investments. The debt limit varies for services that are liberalized and those that are not. However, in both cases the company's debt must not exceed 60% of the value of its assets.

For those who oppose the bill there is hope in the form of an alternative proposal being drafted by the University of Costa Rica. This proposal is written by local experts, whereas President Arias' bill was drafted with the help of international experts.

The university's bill restricts liberalization even more and would not comply with the CAFTA, but will have a chance to be heard by the legislative assembly alongside Arias' bill.