comprehensive reform of the pension and health systems based on the principles of efficiency, financial sustainability and maximum provision for private participation, and taking account of the need for the systems to offer equal and fair treatment on a non-ethnic basis.

Public Utilities and Implementation of Annex 9  

20.The re-organization of Public Utilities is of prime importance for the economy.It must be carried out in a way which respects both the economic integrity of the country and the division of responsibilities under the Peace Agreement. The Council notes in this respect that Public Utilities companies still have to be reconstituted in the Federation. The Council notes however with satisfaction encouraging progress achieved in the railways and telecommunication sectors and fully supports the work now being done in the field of power transmission. The Council welcomes the decision on the establishment of a Joint Electric Transmission center and requests the parties to work further on joint facilities in that sector. Similarly, restructuring must start in the postal sector, which must be separated from the telecommunication activities. Donors are invited to provide technical assistance and equipment in the postal sector.

21. The Council calls on the common institutions to adopt:

• the Civil Aviation act. by 28 February 1999;
• the State Law on Transportation, by 31 March 1999;
• the State Law on Electricity, by 30 June 1999;
• the State Law on Postal Services, by 30 June 1999

and to implement them immediately.

22. The Entities must adopt corresponding legislation in accordance with the State Legislation before 30 September 1999. The establishment of a regulatory body and a regulatory framework in conformity with the Peace Agreement are required for any substantial development of public utilities, and for their subsequent privatization. In particular the Entities must, in the fields of telecommunications, electric power generation and retail distribution adopt appropriate regulatory regimes, clarify ownership and legal structure (June 1999) and devise privatization plans (October 1999) so that privatization can be initiated in the following year. The Entities must pass legislation, including laws on concessions, in order to regulate the activities of private operators performing public services.

23. The Council requests the Entities and the Commission on Public Corporations to activate the Transportation Corporation established by Annex 9 of the GFAP before 30 April 1999, and to take whatever measures are necessary so that the Railway Public Corporation functions properly.

24. The Council requests further implementation of Annex 9. It requests the Commission on Public Corporations to consider actively and propose to the governments of the Entities the creation of additional public corporations as necessary, and urges those governments to implement the Commission's recommendations. Joint Public Corporations are particularly needed in the fields where close co-operation or

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