Wednesday, August 17, 2011

Korean firm may take over Egbin plant before December

The Federal Government may transfer its 51 per cent stake in the Lagos Thermal Station, Egbin, to the Korea Electric Power Corporation before December, as discussions have reached an advanced stage on the protracted deal that has been on for four years.

Our correspondent gathered from government sources that the only hurdle left to be cleared before the transfer of ownership would be completed was the labour issue.
A top government source, who asked not to be named because he was not authorised to speak on the deal officially, said, “We have resolved the gas supply issue and the only issue left now is the labour issue. We have attempted to hold discussions with the representatives of the labour unions, but they insisted that the government must implement the 50 per cent salary increment agreement first before it could discuss severance pay for the workers.

“I believe that once we get over the labour issue, the only thing that will remain will be to reconcile the financial issues and then the transfer will take place. So, I am positive that the transfer can be done before or by December.”

The Bureau of Public Enterprises had recently resumed discussions with KEPCO with a view to concluding the deal on the sale of the government’s stake in the nation’s biggest power plant.

The BPE had earlier announced the sale of the plant to KEPCO in 2007, but unresolved labour issues and the change of government stalled the conclusion of the deal.

Our correspondent gathered that KEPCO was to pay $280m for the 51 per cent government stake in the plant and that the company had made some initial payments in 2007.

However, the suspension of the liberalisation of the power sector by the late President Umaru Yar’Ardua and some unresolved labour and commercial issues prevented the deal from being concluded.

The Egbin power plant has an installed capacity of 1,320 megawatts of electricity and is the only power station in the country that is capable of generating at least 1,000MW to the national grid.

The Federal Government had inaugurated the power sector road map last year with one of the key issues in the document being government’s plan to sell at least 51 per cent stake in most of the electricity companies, otherwise known as successor companies to the Power Holding Company of Nigeria.

Also, President Goodluck Jonathan took an important step towards bolstering investor confidence in the Nigerian power sector on Tuesday as he approved the constitution of the pioneer board as well as the appointment of a manager for the Nigeria Bulk Electricity Trading Plc.


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