2 - 8 May 2002
Issue No.584
|
Al-Ahram Weekly Online 2 - 8 May 2002 Issue No.584 |
||
| Published in Cairo by AL-AHRAM established in 1875 | Current issue | Previous issue | Site map | ||
Electricity lines
Privatisation, power and prices: Hassan Younis, minister of electricity and energy, was in forthright mood as he outlined his policy strategy to the Egyptian Association of Engineers. Mona El-Fiqi reports
Electricity officials and experts who recently gathered at a one-day seminar to discuss the past and future of the electricity sector, found that Hassan Younis, the minister of electricity and energy, had plenty to say on such controversial topics as privatisation, the BOOT (Build, Own, Operate, Transfer) system and the ministry's approach to electricity prices.
More power stations are needed to meet growing consumer demand
Younis opened by defending the ministry's decision to finance new projects itself, rather than relying on the BOOT system as of old. This change does not mean that the ministry faces financial problems, Younis declared.
On the contrary, he claimed it was evidence that the ministry is financially strong enough to pay for new power projects itself, so the BOOT system is no longer needed.
The minister also batted at critics by arguing that the BOOT system has some "negative aspects." He pointed out that costs were paid in dollars, while revenue was collected in Egyptian pounds. Given the fall of the Egyptian pound against the dollar, that makes poor financial sense, he said.
The minister also observed that, because BOOT investors always aim to maximise profits, electricity prices can rise. With the project under ministerial control, the pressure to please shareholders is removed.
Never shy of contentious topics, the minister moved next to privatisation. It is well known that the ministry's promised sale of distribution companies has yet to be realised.
Younis, who is not against privatisation in principle, said that the reason for selling publicly-owned companies to the private sector is that the latter is able to manage companies better than the state. But, he said, although the law allows the government to sell up to 49 per cent of public electricity companies to private firms, this was not a suitable time to offer them for sale.
Younis argued that the companies still need administrative and technical improvements before being offered for sale, and that, in any case, the timing is inauspicious because local and international markets are depressed. After being developed, Younis said, the companies would easily fetch a good price.
Next, the minister stoutly put the case for the electricity industry as a whole. Reviewing the achievements of the sector, the minister noted that the number of households with electricity increased from 4.5 million in 1981 to 17.5 million in 2001. Individuals also used three times as much electricity as they did in 1981.
To meet this growth in consumer demand, new power stations are currently being established, the minister said. The Suez Gulf power station, for example, which has a capacity of 680 megawatts, and will be built at a projected total cost of $375 million, will begin operating in March 2003. East Port Said power station, which also boasts a 680 megawatt capacity, built at a total cost $375 million, will operate from September 2003, the minister said.
Other stations are also being established at North Cairo and Nagaa Hammadi Canal. They are scheduled to come on stream before 2007. Moreover, the minister added that four planned power stations in Damietta, Zefta, Rasheed and Al-Rayah are undergoing preliminary studies.
Finally, Younis grasped the nettle by answering a frank question on electricity prices. Indirectly, Younis denied that prices would rise in the immediate future.
© Copyright Al-Ahram Weekly. All rights reserved
 |
|
|||||||||||||||||
| ARCHIVES Letter from the Editor Editorial Board Subscription Advertise! |
WEEKLY ONLINE: www.ahram.org.eg/weekly Updated every Saturday at 11.00 GMT, 2pm local time weeklyweb@ahram.org.eg |
 Al-Ahram Organisation |
Recommend this page