The state, which has been controlled by the Baath Party
since it took power in 1963 and imposed emergency law still in force, is
seeking around $45 billion in private investment over the next five years to
overhaul dilapidated infrastructure after four decades of failed Soviet style
economic policies.
Hisham Mashfej told Reuters in an interview on Saturday
that the 250 megawatt project in Nasserieh, 60-km northeast of Damascus, will
help meet demand rising by at least six percent a year and ease the burden on
the state's electricity monopoly company.
"We are in dire need of extra capacity, and the
private-public partnership projects will help," Mashfej said on the
sidelines of a Syrian-Turkish business forum in the ancient port city of
Tartous on the Mediterranean.
"I estimate that we will announce the winning bidder
in four months," he added.
Mindful of a history of heavy nationalization under the
Baath Party, the government has been using the term private-public partnership
to describe a new policy of electricity privatization.
Under the 20-year build, own and operate deal, the Syrian
government would provide fuel free of charge to run the power plant in
Nasserieh, buy and distribute the electricity.
The state offered the project last year, but it drew
little interest. Last stage bidders were Terna Energy of Greece and a
Syrian-Finnish consortium involving Cham Holding, a company controlled by
Syrian tycoon Rami Makhlouf, who is a cousin of President Bashar Assad.
The Electricity Ministry tendered the project again this
year after taking the advice of the International Finance Cooperation (IFC), a
division of the World Bank.
The World Bank has been showing more interest in Syria
since the administration of US President Barack Obama began a rapprochement
with Damascus last year, although the Syrian government and several powerful
individuals, including Makhlouf, remain under US sanctions.
IFC officials had said that Syria needed international
standards to govern infrastructure projects otherwise financing could be a problem
and international banks would hesitate to lend money for companies to do work
in Syria.
The new tender closed at the end of September with 18
companies applying for the pre-qualification stage, including Terna, and the
consortium of Cham Holding and Finnish conglomerate Wartsila, Mashfej said.
"We received bids from all over, including the two
companies that had qualified last time and Gulf companies," he said.
Mashfej said the IFC is also advising the Electricity
Ministry on modernizing laws and regulations to help assure investors about the
risk of making serious investments in Syria and ensure the viability of the
project.
"The first thing investors are asking us about is
the laws, the limits of their responsibility and arbitration," he said.
Under new draft regulations electricity generation and
distribution would be separated into two state divisions, instead of the
current single entity, he said.
According to government data, the Syrian state has 8,000
megawatt of generation, with 2,500 megawatt from old plants due to be
decommissioned between 2011-20.
At least $9 billion of investment in power is needed to
meet demand over the same period.
Mashfej said the government is in the process of
preparing to choose companies to build two wind farms with generation capacity
of 100 to 150 megawatts each on concession basis.
Denmark's Vestas and Turkish companies are interested in
bidding, he said.
