Power-Plant Privatisation Stalls
Power-Plant Privatisation Stalls
The privatisation process for the Kambarata hydroelectric scheme and the Bishkek coal-fired power station has been stalled by a lack of transparency over how they will be denationalised, but NBCentralAsia commentators say the government should take its time and strike a deal that works in Kyrgyzstan’s favour.
On June 5, President Kurmanbek Bakiev asked parliament to speed up the process of approving laws on the electricity sector, including ending a ban on privatising the Kambarata plant, and hiving off the Bishkek power station from state ownership.
One draft law would give the government the right either to make the Kambarata-1 and -2 power stations part of a new joint venture, to lease them out as concessions, or to place them under trust management.
Both power stations are still under construction and need further investment before they can be finished. With a combined capacity of over 2,000 megawatts, they could provide an uninterrupted energy supply to several Central Asian countries at the same time.
Privatisation of these power stations is part of the fourth stage in the government’s drive to denationalise the energy sector. At the end of May, parliamentarians were highly critical of the way the first three phases had been handled and decided to postpone a review of further privatization until a clear and transparent plan had been drawn up to avoid a repetition of past mistakes.
However, some members of parliament are concerned that delaying a decision on whether to pass the new privatisation laws could make it harder to find investors and place the Kambarata construction projects at risk.
Member of parliament Bolot Maripov says the government has provided neither a clear-cut plan of how the power plants will be privatised, nor an analysis of the sector’s profit-making potential and of how much the government will earn from the privatisation.
“We are supposed to agree to it without knowing what we’re getting,” said Maripov. “The government wants to start negotiating without knowing how much money Kyrgyzstan needs and what amount it should be looking to raise,” said Maripov.
Sapar Orozbakov, director of the Bishkek Centre for Economic Analysis, says many contradictory issues and obstacles need to be overcome before Kyrgyzstan can make investors happy while meeting its own needs.
“It would be desirable for Kyrgyzstan to retain 51 per cent of the shares in the Kambarata joint venture, but that clearly wouldn’t suit investors, so I think we will face a long negotiation process,” he said.
Rafkat Hasanov, head of the Investment Round Table group, also favours a “gentle privatisation” where the state retains a controlling share but investors enjoy adequate economic freedom.
“This privatisation model would mean the industry is managed by the private sector but the state has a clear supervisory role. If management proves unsatisfactory, some of the industry can be transferred to another company,” he said.
(News Briefing Central Asia draws comment and analysis from a broad range of political observers across the region.)
On June 5, President Kurmanbek Bakiev asked parliament to speed up the process of approving laws on the electricity sector, including ending a ban on privatising the Kambarata plant, and hiving off the Bishkek power station from state ownership.
One draft law would give the government the right either to make the Kambarata-1 and -2 power stations part of a new joint venture, to lease them out as concessions, or to place them under trust management.
Both power stations are still under construction and need further investment before they can be finished. With a combined capacity of over 2,000 megawatts, they could provide an uninterrupted energy supply to several Central Asian countries at the same time.
Privatisation of these power stations is part of the fourth stage in the government’s drive to denationalise the energy sector. At the end of May, parliamentarians were highly critical of the way the first three phases had been handled and decided to postpone a review of further privatization until a clear and transparent plan had been drawn up to avoid a repetition of past mistakes.
However, some members of parliament are concerned that delaying a decision on whether to pass the new privatisation laws could make it harder to find investors and place the Kambarata construction projects at risk.
Member of parliament Bolot Maripov says the government has provided neither a clear-cut plan of how the power plants will be privatised, nor an analysis of the sector’s profit-making potential and of how much the government will earn from the privatisation.
“We are supposed to agree to it without knowing what we’re getting,” said Maripov. “The government wants to start negotiating without knowing how much money Kyrgyzstan needs and what amount it should be looking to raise,” said Maripov.
Sapar Orozbakov, director of the Bishkek Centre for Economic Analysis, says many contradictory issues and obstacles need to be overcome before Kyrgyzstan can make investors happy while meeting its own needs.
“It would be desirable for Kyrgyzstan to retain 51 per cent of the shares in the Kambarata joint venture, but that clearly wouldn’t suit investors, so I think we will face a long negotiation process,” he said.
Rafkat Hasanov, head of the Investment Round Table group, also favours a “gentle privatisation” where the state retains a controlling share but investors enjoy adequate economic freedom.
“This privatisation model would mean the industry is managed by the private sector but the state has a clear supervisory role. If management proves unsatisfactory, some of the industry can be transferred to another company,” he said.
(News Briefing Central Asia draws comment and analysis from a broad range of political observers across the region.)
