TICO unveils utility development model with lower consumer tariffs and zero subsidies
Muscat, Oman, May 14th, 2012: In a move that could benefit consumers in Oman and the region, UTICO, a leading private utility developer in the Middle East, unveiled a utility development project that would lead to lower consumer tariffs and zero subsidies at the Oman Water and Power Summit 2012 that recently concluded.
UTICO is part of the US$3 billion Ghantoot Group, which in February this year had announced a US$500 million investment in Oman's hospitality, water and energy sectors. As part of that process, UTICO is in active talks with Omani authorities to implement utility and water desalination projects that could lead to lower water and power bills for Oman's consumers.
The proposal is being currently reviewed by Oman's Ministry of Finance, the Public Authority of Electricity and Water and also Oman Oil Company. When implemented, UTICO's overall projects will also generate more than 2,000 jobs for Omanis, besides translating to significant savings for the government.
Addressing the Oman Water and Power Summit, Richard Menezes, Executive Vice Chairman and Managing Director of UTICO, one of the Middle East's largest Private Utility and Developer, emphasised the role of the utility developer in creating value for both the government and consumers.
"Consumers are not the end but the beginning of an economic regeneration," Menezes told the gathering. "Therefore, they should decide what they want to pay and how they want to be served. Value creation and excelling in consumer satisfaction along with job creation should be the role of the developer of utilities, not building subsidies."
He added that Oman gave over 200 million Rials in subsidies in water and power sector last year alone, which could have been made to zero for water or halved, if not fully removed. It could also have generated net profits for the government. Oman's budget deficit is projected this year at OR 1 billion, which means 20 per cent of this deficit is allotted to the water and power sector.
UTICO has offered a net revenue generating model with zero subsidy model to the Public Authority of Electricity and Water for several projects including Musandam Water and Power Supply. It also requires no off-take guarantee, thus saving hundreds of millions of Rials for the government.
UTICO owns more than 32 million gallons of desalination plants and is developing another 15 million gallon desalination facility at the moment. It also develops and operates them. The total power plant ownership is 120MW. Another 300MW is currently being built. The company has over 300 km of T&D network and over 100,000 consumers.
Focussing on renewable energy as the future, this year, UTICO has also set aside a US$20 million investment fund for viable renewable projects.
In February this year, the Ghantoot Group announced that it would establish two power plants, three hotels and investment in other facilities in water desalination, transmission and distribution and oil and gas projects aimed to benefit the Sultanate.
© Press Release 2012
