Dutch defer utility privatization

5 July 2002 – The newly elected Dutch coalition government has decided not to pursue the privatization of the countries utilities until the European Union has established its own guidelines.

The coalition partners, winners of last May’s elections, said Wednesday that full privatization of regional electricity networks will only be allowed once appropriate EU laws are drawn up and implemented.

The attitude of the right-wing grouping will be a disappointment to Dutch power companies who had hoped that the pro-business government would be more receptive to privatization. The power companies are looking to take positions in the regional electricity distributors in order to participate in the rapidly consolidating European power market.

The distribution networks are the most valuable parts of utilities operations, and they would be the biggest reason private companies would buy Dutch power assets.

The previous Dutch administration also delayed privatization. Annemarie Jorritsma, the outgoing economy minister, last year decided not to allow the sale of majority shares in the local distribution networks of Dutch utilities. Minority sales would be allowed.

Meanwhile, the new government will keep open the Netherlands only significant nuclear power plant until at least the end of its term.

The previous government, pressured by parliament, wanted to close the 450 MW facility, which produces roughly 4 per cent of total Dutch electricity supply.

The new government will keep running the plant to comply with the Kyoto protocol, which aims to reduce greenhouse gas emissions.

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