Threatens sale of utility to new investors
Energy minister Phillip Paulwell says that Govern-ment can, as a last option, sell Jamaica Public Service Company (JPS) to new investors rather than allow the utility to maintain its “monopolistic arrogance”.
Paulwell did not say how Jamaica would force the sale of the power company, which would likely require its takeover if its owners are hostile to the plan, given the Government’s minority 19.9 per cent holdings.
“There are serious players coming to us and any implied threat can be responded to,” Paulwell said midweek.
Its the latest tit-for-tat surrounding the push to end JPS’ monopoly on power distribution, and follows comment by JPS CEO Kelly Tomblin Tuesday that Jamaica would likely have to buy out the majority owners of the utility if it wanted to pursue liberalisation.
JPS’ current exclusive licence has another 16-year run to 2027.
“I don’t believe that Government has to buy it back,” he said, in response to Tomblin’s assertion.
“People are salivating to take part in the energy sector. The Government won’t go there, but players are salivating to get into the market”.
JPS is owned 40 per cent by Marubeni Corporation, 40 per cent by Korea East-West Power and 19.9 per cent by the Government of Jamaica. The other 0.1 per cent is held by individuals.
The cash-strapped Government has little capacity to buy out Marubeni and East-West Power’s stake in JPS. The utility is one of the largest companies in Jamaica, with total assets valuing US$1.05 billion (J$91 billion), and a net worth of US$371 million (J$32 billion) as at December 2011.
Private negotiations
Paulwell told the