Privatization tips october 1998
ARGENTINA – BRAZIL – CHILE – HONDURAS – MEXICO – PANAMA
ARGENTINA
- Argentine Minister of Energy and Mining, Alfredo Mirkin, has stated that the terms governing the privatization of the country’s three nuclear plants could be ready as early November. The offer include the Atucha, Atucha I and Embalse plants. Construction of the Atucha plant came to a standstill in 1995 when 85% of the project had already been completed. The remaining two plants currently supply 11% of Argentina’s electricity needs. According to the preliminary governmental decree that will help kick-start the process, the winning investor will obtain 89% of the shares of the Guenar S.A. company, which is to be formed when the privatization process is underway, and will be awarded concessions to conduct and perform maintenance work on the nuclear facilities. Another 10% of the shares will be sold to employees, while 1% will remain in the hands of the State. As part of the terms of the privatization process, the winner will be responsible for completing work already started on the Atucha plant within a period of six years.
- Minister Mirkin also pointed out that the terms for the privatization of the
- Yacyretá dam were expected to be fully hammered out in three months’ time. The Argentine moving ahead with talks with the Paraguayan government, co-owner of the Yacyretá dam, aimed at reaching an agreement on the sale. The Yacyretá dam, which is located on the Paraná River and which was started in 1983, was designed with 20 turbines (all installed to date), a water level of 83 meters and a production capacity of 12,000 gigawatts per hour.
- At present, however, the water level does not go beyond 76 meters, and, moreover, the dam is operating at only 60% of it normal capacity. The project has resulted in currents debts of over US$6 billion for Argentina, and according to some estimates, it may need another US$800 million to be completed. Completion and management of the dam will be separately put out for tender, though a bid price is yet to be announced.
BRAZIL
- The Brazilian National Development Bank (BNDES) has announced the sale of the Alagoas state electricity generating plant, slated for 3 December, at a floor prices of US$243 million. Bank officials have also announced that this will be the final sale of an electricity sector asset for 1998. The Brazilian government plans to sell off its 88.71% share of the Companhia Energetica de Alagoas (CEAL) electric utility. The state-run company, Electrobras, currently owns 70.64%, while BNDES controls the remaining 18.07%. With this process, 4% of CEAL’s shares will be sold to employees of the company as of mid-November.
CHILE
- The Chilean Public Works Ministry has announced plan to start awarding concessions to private individuals in 1999 for such activities as the development of infrastructure projects at an approximate value of US$459 million. Another US$1 billion will be earmarked for the year 2000.
- Concessions for the development of infrastructure projects were first awarded in 1993 and involve investments for as much as US$3 billion. The government also plans to grant concessions for three of the country’s major Ports, a process which was originally slated to begin in October but which has had to be deferred to 1999 because of legal actions taken by several shipping companies in this regard.
HONDURAS
- The government announced in mid-October that plans were afoot to privatize in 1999 the state-run National Electrical Energy Corporation (ENEE) whose assets are valued at some US$500 million. According to reports received from the corporation’s board of directors, the entity is currently being appraised and the privatization process must first be approved by the Congress. The ENEE, which supplies 40% of Honduras’ energy needs, has been in operation since 1950 and, at present, employs approximately 6,000 workers.
MEXICO
- The Transport and Communications Ministry reported that 6 international consortiums would be taking part in the privatization process involving the Cancun, Cozumel, Huatulco, Merida, Minatitlan, Oaxaca, Tapachula, Villahermosa and Veracruz airports. The auction is set for 17 November, while operations under the new owners is programmed for December.
- According to the terms of the privatization agreement, interested consortiums must include a Mexican partner and an international airport.
PANAMA
- Sale of 51% of the shares of 4 state-owned electricity generating plants belonging to Panama’s Hydraulic and Electrification Resources Institute has been put off until 18 November. The postponement came about at the request of the bidding companies, which consider the details relating to the operation to be "complex." Of the 26 companies that were initially interested in participating in the process, only 10 have submitted bids to be reviewed during the approval stage.. These include Tractebel, Belgium; ABB Energy, Switzerland; I.G.S. International and dominion Energy, U.S.A.; Hydro Quebec, Canada; Electricidad de Caracas, Venezuela; Emgesa & Enrom Caribe III, Colombia, and A.E.S. Coastal Power Panama Generation.
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