New shape for power sector

02 November 2001

The unbundling of Oman's power sector is starting to take shape. Ten companies are to be created to take over the assets currently owned by the Ministry of Housing, Electricity & Water (MHEW). The new entities are expected to be formally established in the first quarter of next year, following the approval of the new sector law. Once the bill has been issued, the government will start the sell-off process, beginning with the three power-generating companies (MEED 5:10:01).

The three generators to be formed are Ghubrah Power & Desalination Company, Rusayl Power Company and Wadi Jizzi Power Company. They will take control of the 603-MW Ghubra co-generation plant, the 690-MW Rusayl plant and the 337-MW Wadi Jizzi plant. The sale of these companies is expected to take place in the second quarter of next year.

This will be followed by the sell-off of the Transmission & Dispatch Company (Transco) and the three distribution companies. These are the Muscat Distribution Company (Disco 4), covering the Muscat region; Distribution Company Five (Disco 5), covering South Batinah, Dakhiliya and Sharqiya; and Distribution Company Six (Disco 6), covering North Batinah and Dhahira. The Rural Systems Company, covering all the assets in Dhofar, Musandam, Al-Wusta and Masirah island, is expected to remain under government ownership, along with the Government Holding Company (GHC) and the Power & Water Procurer.

The unbundling of the sector has been based on the following assumptions:

gas turbines and related generating equipment up to 132-kV switchgear will be transferred to the three generation companies;

all 132-kV switchgear in the power stations' substation yards, and grid substations, will be transferred to the transmission company;

the remaining 33-kV, 11-kV and low voltage assets will be allocated to the distribution company in that region, except for those assets located in the designated rural areas;

all MHEW buildings, with the exception of those in Musandam, have been allocated to GHC.

The advisory team for the privatisation programme is led by ABN AMROand includes Mott MacDonaldand Denton Wilde Sapte, both of the UK.

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