Duke complaints denied by Peruvian regulator

10 May, 2002 – Peru’s government agency responsible for overseeing the privatization of two electricity companies on Wednesday refuted allegations that it was to blame for Duke Energy withdrawing from the bidding process.

“We can’t negotiate to set the rates because we have to follow the law and technical analysis,” Osinerg head Alfredo Dammert said at a broadcast press conference.

Duke Energy Corp said Wednesday it has ruled out participating in the bidding in the May 15 auction for state-owned electricity generating companies Egasa and Egesur due to disagreements with Osinerg over procedures to set the rates.

Finance Minister Pedro Pablo Kuczynski said Wednesday the auction date won’t be delayed as other bidders remain interested.

Among other potential bidders for the companies are US companies AES Corp, PSEG Global Inc and NRG Group Inc as well as Tractebel SA from Belgium and Swedish power group Statkraft AS.

Various citizen groups plan to protest against the privatizations in a regional strike on May 14.

The sale has been delayed before and observers said that a new postponement would hit hard at the government’s privatization plans.

“We believe the entire privatization process would be in danger if this auction is once again postponed. Should this occur, we think it is also possible that this sort of defeat for the government could bring more social pressure in various areas, as the population might be ready to ‘win more battles’,” Santander Central Hispano analyst Jose Antonio Roca said in a report.

The base price for the auction of regional electricity generating companies Generacion Electrica de Arequipa, or EGASA, and Generacion Electrica del Sur, or EGESUR was set jointly at $156 million.

The Peruvian government hope to raise a minimum of $700m through privatizations this year.

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