Saudi economic council nods to power '\'regulator'\'
Saudi Arabia's Supreme Economic Council on Sunday approved the establishment of an authority to "regulate electricity services" in the kingdom, a step seen as necessary to restructure the power sector, SPA news agency reported.
The new authority will "regulate the interests of consumers, operators and investors" in a sector that has been undergoing restructuring since the formation of the Saudi Electricity Company (SEC) last year.
Industry and Electricity Minister Hashem Yamani said last week the establishment of a regulator would complete the restructuring of the power sector in the kingdom. Yamani estimated that the power sector would require investments of more than $90 billion until the year 2023, some $26 billion of it in the next five years.
The decision is also expected to attract more foreign investments into the power generation field, and soon into the transmission field when it opens up for foreign investments. Yamani also said SEC was ready to negotiate with local and foreign investors about joint power projects in which they would build new stations or participate in the rehabilitation of old plants.
The Saudi electricity sector is undergoing major restructuring with SEC becoming more private following the complete lifting in April 2000 of government subsidies for electricity. Saudi Arabia in October last year hiked the average electricity tariff rates for residents from 2.1 cents per kilowatt/hour to 4.5 cents per kilowatt/hour. Before the increase, the combined losses of the Saudi power sector reached 48 percent of total sales revenues and the total outstanding debt of the power sector reached $26 billion at the end of 1999.
The Council, meeting under its chairman Crown Prince Abdullah Bin Abdul Aziz, also extended protection to 176 domestic products by raising customs tariffs to 12 percent on imports of equivalent commodities. — (AFP, Riyadh)
© Agence France Presse 2001
© 2001 Mena Report (www.menareport.com)