Electricity-starved Iraq opened the door Sunday for independent power firms to build and operate generating plants to help boost grid capacity and galvanise reconstruction and economic growth.
Interim electricity minister Aiham al-Samarrai told reporters that the offer was open to domestic and foreign companies, with the priority on bringing a swift end to the frequent power cuts in the war-battered country.
Using economic methods tried and tested in countries such as Turkey and Egypt, Iraq's electricity sector will be opened up using BOO (build-own-operate) and BOT (build-operate-transfer) models.
The latter gives the chance for plant ownership to be transferred to the government in five to 10 years.
He said the two models would allow power capacity to increase quickly without burdening already stretched government coffers with punishing start-up costs.
Instead, the government will buy the electricity from the operator at a pre-agreed price.
"It's an idea to speed things up ... all countries that lack liquidity have adopted it," he said.
He said the electricity ministry's revenues from fee collection this year will not exceed 12 million dollars, while the investments required are estimated at several billion dollars.
Samarrai said his ministry would discuss projects with any company willing to invest in an Iraq still in the throes of an insurgency, and that a tendering process would begin only if there were enough bidders.
"If many (companies) come, I'll choose according to the rate," or the price of electricity to be sold to the government, "and according to the fuel to be used" for electricity generation, he said.
"In view of the security conditions, no one might come. I might only have one offer, therefore why should I put a tender? But I will proceed in accordance with the laws," he said.
He said current government plans earmark 6.5 billion dollars for 201 power projects until end 2005, but he expected those funds to come from donors, including the United States and the BOO and BOT models would run in addition.
The plans provides for 1.9 billion dollars to fund 27 new electricity generation projects, 1.4 billion dollars for rehabilitating old generators and power plants, 1.6 billion dollars for transmission lines and 1.6 billion dollars on distribution and command and control stations.
Samarrai expected rehabilitation work to double Iraq's electricity generating capacity to 7,076 megawatts by July to meet peak summer demand as air conditioners battle sweltering temperatures.
He said Syria and Turkey started earlier this month to supply Iraq with 50 and 200 megawatts respectively, while Iran, Kuwait and Jordan will follow in July, providing 100, 200 and 150 megawatts.
The minister hoped capacity would reach 12,000 megawatts at the end of the year, but stressed that continued sabotage and looting were hampering work.