|Electricity suitor comes knocking|
|South korean firm expresses interest in potential Privatization of edl
A leading South Korean power company expressed its interest on Monday in taking part in the privatization of the electricity sector in Lebanon.
"Although I am not quite certain on when and how the Lebanese government would decide on the privatization of Eelectricite du Liban (EDL), I could say today that KEPCO (Korea Electric Power Corporation) would be one of the most suitable partners to Lebanon," said KEPCO's chairman and CEO, Han Joon-ho.
Established in 1962, KEPCO is a South Korean public utility in charge of the generation, transmission and distribution of electricity.
The government of Prime Minister Fouad Siniora has come out in favor of the privatization of the distribution and production sectors of EDL.
The Finance Ministry said that EDL is bleeding the resources of the treasury, noting that the annual losses of the company exceed $800 million a year.
Some of Siniora's team warned that the government may be compelled to raise the value added tax to 12 percent from-the current 10 percent ceiling if the Ministry of Energy and Water fails to cut waste through a series of drastic measures.
Three months ago, KEPCO started operating and managing the Zahrani and Deir Ammar power plants, which generate around 40 percent of Lebanon's electricity. Last year KEPCO signed a five-year contract with EDL worth $87 million.
KEPCO also stated its interest in expanding its activities in Lebanon at a later stage by taking over electricity transmission and distribution.
Han, who met earlier with Siniora, was delivering comments on the occasion of the inauguration of his company's operation in Lebanon.
The KEPCO executive said that the main aim of the company was to "improve the thermal efficiency of the two plants in order to reduce the production cost."
Han said that KEPCO's objective was also to carry out capacity-building for the Lebanese staff.
Speaking about the challenges of operating the two power plants, Han said that with the demand for electricity exceeding supply, the electric utility in Lebanon is pressured to run its available power plants up to extreme limits, at the cost of non-compliance with recommended maintenance.
Han said the status of the two power plants when KEPCO took over was "not bad."
He said it was important for Lebanon to switch from fuel oil to natural gas, given elevated oil prices. He added that the exploitation of hydraulic resources for power generation should also be taken into consideration.
Han compared the situation of power in Lebanon today with that of South Korea in the early seventies when the supply of power was restricted. The solution, he said, was in "reaching a consensus on the investment priorities and finding the viable way to raise the needed money."
KEPCO serves 17 million customers at home and has an annual turnover of $2.7 billion, ranking fifth worldwide. The company currently operates in countries including China, the Philippines, Libya and Nigeria. Its project in Lebanon is its first in the Levant region.
Beirut,05 15 2006
Raed El Rafei
The Daily Star