The privatization of Turkey’s energy sector is to continue in spite of a court ruling which has annulled the transfer of operational rights for eight thermal power plants to the private sector, Reuters reports.
The energy ministry said, following the announcement of the court decision, that the ruling will not affect its work on privatization.
“We will appeal to the Council of State to reverse the decision because we have 29 other verdicts from other similar courts that were in favour of the energy ministry,” the Minister, Cumhur Ersumer said.
The ruling covers the transfer of the operation rights to eight thermal power plants, worth a total of $1.24 billion. The administrative court in Ankara cancelled these transfers on the grounds that the energy ministry was not authorized to carry out the tender process, which could only be performed by the government.
The court case looked at only one plant, Cayirhan, but the court extended its decision to cover all the others. The case was brought by a worker at the Cayirhan plant; employees believe privatization may lead to job losses.
The energy ministry issued tenders in November 1996 to transfer operational rights of 12 coal fired power plants to the private sector for 20 years. Tender results were announced in October last year; two were cancelled and four plants combined in two tenders, resulting in eight plants instead of the original 12.
The ministry is now preparing draft contracts which will be submitted to the government and the Council of State for approval. The power purchase agreements are also being prepared.
Among the winners are a consortium involving UK company National Power, Pacificorp, Mimag and Bayindir Holding, which will operate plants at Yatagan and Yenikoy-Kemerkoy in southwest Turkey. A consortium of Peabody, NRG and Koc Holding will operate the Kangol power plant; the cost of the operational rights was $125 million.
The companies to take charge of the plants have pledged in invest an initial $385 million in the stations to increase their outputs by 28 per cent, while cutting production costs by 15 per cent, to $0.0313/kWh from $0.0363/kWh.