US firm gets JPSCo

Southern Energy signs MoU to buy into power plant

Southern Energy Inc., of Atlanta, Georgia, is the company likely to acquire a share of the state-owned Jamaica Public Service Company (JPSCo), the local light and power utility.

The Jamaican Government made the announcement in September that it has signed a Memorandum of Understanding (MOU) with the US company and the share purchase is expected to be completed by the end of this year.

According to the statement from the Prime Minister's Office, Southern Energy has been granted an exclusive right, for a period ending December 31, 2000, to conduct their due diligence reports and negotiate the terms and conditions under which it proposes to acquire an agreed percentage stock of the JPSCo, along with other management rights."

Southern Energy, which is a leading power utility in the United States, will be required to indicate the price it is willing to pay for the portion of shares being sold by JPSCo within 60 days. If deemed acceptable, it will provide the basis for government to proceed to finalise the agreement.

According to Government sources, Southern Energy was selected because its proposal was closet to the administration's overall criteria for the divestment of JPSCo and the future development of the country's energy sector.

Jamaica's team for the negotiations will be led by Dr. Vin Lawrence, NIBJ Board member, Professor Gordon Shirley, JPSCo chairman; Godfrey Perkins, Permanent Secretary, Ministry of Mining and Energy; Carol Jones, Deputy Financial Secretary, Ministry of Finance and Planning; and Maureen Vernon, Director of another state agency. Stephen Wedderburn will be secretary to the negotiating team.

Southern Energy had been trying to acquire a stake in the local light and power company since 1995 but failed in its first attempt when Houston Industries made a better offer of US$160 million. That offer was later turned down, as the government decided to postpone the sale because it was unhappy with the deal.

The other two companies to have made an attempt to acquire a stake in JPSCo in recent weeks were Enron Corporation and Duke Energy which backed out of the bidding after being told by government the entire company was no longer for sale.