Power sector law faces delays

18 January 2002

The new law covering the local power industry is unlikely to be issued before the third quarter of 2002. Project sources attribute the delay to ongoing negotiations between the government and its international team of consultants over extending the advisory contract. The extension will provide for the team, made up of ABN AMRO,and Mott MacDonaldand Denton Wilde Sapte, both of the UK, to complete detailed recommendations on the privatisation of assets in the sector (MEED 5:10:01).

Sources say that the two parties are in the final stages of negotiations over the contract extension. Once it has been signed, a further 22 weeks will be required to complete work on the new law. On completion, the law will be passed to the Majlis al-Shura and state council for comment before being sent to the court of Sultan Qaboos for final approval. The original advisory contract expired in mid 2001.

Publication of the new law will allow the government to start the process of selling off existing power assets. Assets will be unbundled into new companies and then sold off, beginning with three power-generating entities - Ghubrah Power & Desalination Company, Rusayl Power Company and Wadi Jizzi Power Company. This will be followed by the sell-off of the Transmission & Dispatch Company (Transco) and the three regional distribution companies (MEED 23:11:01).

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