10 April 2002 – Just a week after the end of a 38-day strike of power generation workers opposed to privatization, the South Korean government is set to finalize plans for the sell-off of part of the industry.
An official from the Ministry of Commerce, Industry and Energy said the government plans to announce an auction this month to select a financial adviser to carry out Korea Electric Power Corporation’s (Kepco) privatization process.
Last April, the government split Kepco’s power generation operations into five non-nuclear generation companies and one hydro and nuclear power generation company, as part of the restructuring of South Korea’s power industry and Kepco’s privatization.
The government will sell the five non-nuclear units, responsible for about 60 per cent of total power generation, to the private sector, and maintain control of the nuclear generation unit for security reasons.
The first step in the privatization process is the sale of two power generation companies through stake sales with management rights, as well as a listing of their shares, the ministry said in a statement. The first company to be sold will be chosen by June.
The government plans to limit management rights in each of the five power generation companies to just one company, the statement said.
Foreign investors will be allowed to invest in up to 30 per cent of South Korea’s total power generating capacity Singapore Power Ltd., U.S.-based Mirant Corp. and Belgium’s Tractebel S.A. have all expressed interest in acquiring stakes in Kepco’s assets.
Korean power workers fear privatization will trigger massive layoffs and allow foreigners to acquire holdings in assets deemed crucial to national interest.