Enron collapse threatens Palestinian power plant
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Special to World Tribune.com
MIDDLE EAST NEWSLINE
Friday, March 29, 2002
GAZA CITY Ñ A Palestinian Authority project to construct a
136-megawatt power plant in the Gaza Strip has been endangered by the
collapse of the U.S. energy giant Enron.
PA officials said the collapse of Enron appears to end hopes that the
$140 million facility can be completed. They said Enron could be forced to
sell the power plant as part of bankruptcy proceedings.
Other U.S. companies could maintain investment in the project, the
officials said. But they doubt whether Enron's terms could be preserved or
whether investors could obtain sufficient risk insurance. The United States
had provided $22.5 million in political risk insurance.
The project was meant to provide electricity for 136,000 homes through
power generation based fuel oil. Later this decade, power was to have been
generated by natural gas.
The facility was launched in 1999 and was based on a build-and-operate
basis that would last 20 years. A key investor in the plant was the family
of Saudi fugitive Osama Bin Laden. The CIA and State Department expressed no
objection, asserting that the Binladin Group, headed by Bin Laden's father,
was not connected to the Al Qaida chief.
The officials said the Binladin Group as well as Palestinian investors
have been approached to renew the project. Under the project, Enron was to
have sold electricity from the plant to the PA.
Construction of the Gaza power plant was suspended nearly 18 months ago
in the wake of the Israeli-Palestinian war. The prime contractor for
constructing the plant, ABB, withdrew from the project more than a year ago.
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