A private power project in Oman, hit by delays after a key subcontractor opted out, is expected to proceed shortly with the induction of a new player to execute the construction contract.

The Al Kamil Power Company (AKPC) has entered into an agreement with AIC Egypt to execute the contract jointly, a report in the Times of Oman said.

AKPC was set up by the UK-based International Power (IP), previously know as National Power (NP), to build, own and operate a 285.5 MW natural gas and fuel oil-fired electricity-generating plant in Sharqiya, at a cost of $130 million.

The EPC (engineering, procurement and construction) contract had been subcontracted to Hyundai Engineering Company, but the financially-

troubled Korean firm was forced to pull out of the venture.

AKPC was set up by the NP in July 2000 to carry out the Al Kamil independent power project (IPP) on a build, own and operate (BOO) basis.

A power purchase agreement had been signed between the Ministry of Electricity and Water and AKPC for a period of 15 years.

BankMuscat and Societe Generale of France are to syndicate the $99 million debt funding for the project.

Meanwhile, Oman has signed a final accord with a consortium led by US firm PSEG global to build a RO90 million ($234 million) private power plant in the southern port city of Salalah.

Electricity Minister Mohammad bin Ali Al Qetabi and PSEG deputy chairman Prabhakaran Vanchi signed the agreement for the 200-MW plant. A memorandum of understanding for the project had been inked in November.

Vanchi said construction of the plant would begin in later this year and operations were expected to start in March 2003.

"It is a 20-year concession agreement to provide gas-fired electricity to some 36,000 customers in Salalah," he said.

Dhofar Power Company, 81 per cent owned by PSEG Global with the rest held by local companies, will operate the plant. PSEG Global is a subsidiary of US-based Public Services Enterprises Group Inc.