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Bidding deadline passes in long-overdue SPP tender

BINDING offers for a 49 per cent stake in gas utility SPP had not been opened by the sale commission as The Slovak Spectator went to print February 28.
But as a 15:00 deadline for the bids approached, the Sita news agency claimed that the only US firm in the tender, energy company Williams, had withdrawn from the running for SPP several weeks ago after its technology wing ran into financial trouble.

BINDING offers for a 49 per cent stake in gas utility SPP had not been opened by the sale commission as The Slovak Spectator went to print February 28.

But as a 15:00 deadline for the bids approached, the Sita news agency claimed that the only US firm in the tender, energy company Williams, had withdrawn from the running for SPP several weeks ago after its technology wing ran into financial trouble.

Williams stock fell eight per cent on February 25 after daughter company Williams Communications Group Inc announced it was seeking bankruptcy court protection from creditors.

"Williams stepped out two weeks ago, but the information has just surfaced now," said an anonymous source quoted by the news agency.

The apparent withdrawal of the US firm appeared to leave six European companies in the running, including the French firm TotalFinaElf, a consortium between Ruhrgas (Germany), Gaz de France (France) and Snam (Italy), the Russian Gazprom and the German RWE. None of the firms commented on February 28 whether they would submit a bid.

SPP is the second biggest gas distributor in the world, transporting more than 90 billion cubic metres of Russian gas through Slovakia annually. The sale of the 49 per cent stake, which includes management control, has been called the 'macro event' of the year for the country. The government expects Sk100-150 billion ($2-3 billion) for the share.

Cabinet members backing the sale see it as the apex of Slovakia's ambitious programme since 1998 to sell off state holdings in banks and the utility sector. Deputy PM Ivan Mikloš, the deal's prime mover, has said the direction of the company by professional private sector managers would also reduce room for corruption.

The former director of the SPP, Ján Ducký, was murdered in January 1999 after having signed what police suspect were billions of crowns in fraudulent promissory notes in the company's name.

Despite general agreement on the need to sell SPP, however, the deal was almost torpedoed in February when leftist members of cabinet reneged on a March 2001 agreement and said the sale method should be changed.

Cabinet saved the tender February 20 by agreeing not to alter the conditions, but to send more of the proceeds toward a pension reform project.

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