The State Electricity Regulatory Commission (SERC)
yesterday opened bidding for a series of national electricity generation assets,
calculated to be worth at least 17 billion yuan (US$2.1 billion).
"The bidding invitation will encourage participation from enterprises of any
category. Multiple rounds of evaluation, price bidding and negotiation will be
conducted," the SERC said in a statement. "In the process of evaluation, the
long-term future development of target enterprises will be taken into
consideration."
The statement makes it crystal clear that both local and foreign buyers are
entitled to make offers, provided they meet a series of stringent criteria.
According to the regulator, potential investors in power generating assets
should abide by the relevant laws and regulations and perform well in financial
terms. They should have a clear development strategy and be swift in making
decisions.
Bidding criteria also include having a certain level of registered capital
and sound commercial credit. Experience in electricity generation investment and
management would be preferred, but not essential, the SERC statement emphasized.
The bulk of the bidding work will be wrapped up by the end of the year, said
the SERC.
The available assets have an aggregated power generating capacity of 9.2
million kilowatts (KW) from 38 power plants, among which seven are listed
companies. The plants are spread across 21 provinces, municipalities and
autonomous regions. Electricity generating capacity from the seven public firms
mounts to 3.68 million KW.
The power stock is in the hands of the State Grid Corporation and China
Southern Power Grid. In 2002, the Chinese Government commissioned them to manage
and sell the assets to finance the ongoing reform of the power industry,
according to the Xinhua news agency.
China launched a historic reform of its electricity industry in 2002.
According to the reform road map, State-owned power assets will be split into
electricity generation, transmission and distribution. They will be privatized
and market-oriented competition will be introduced.
A major breakthrough in the reform came in 2002, as two power grid
corporations, five power generating groups and four subsidiary consulting and
engineering groups were established.
Experts say yesterday's official announcement of public bidding for 9.2
million KW of generating capacity was another milestone.
"It demonstrates that power sector reform has moved to a new level that the
sale of 9.2 million (KW) capacity is going ahead," one analyst commented.
China's installed generation capacity and power production have been increasing
at an unprecedented annual average rate of 9.2 per cent and 13.8 per cent
respectively since the reform began, the SERC Chairman Chai Songyue said in
August.
(China Daily 10/12/2006 page10)
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