Attarat ‘grave deception’ case still ongoing, prospects not good for NEPCO

(Photo: Jordan News)
AMMAN — The adjudication in the “grave deception” case filed by the National Electric Power Company (NEPCO) against the Attarat Power Company is yet to be reached, a NEPCO source who did not want to be identified told Jordan News, but legal and energy experts say it is a lost case. اضافة اعلان

NEPCO had requested arbitration from the International Chamber of Commerce (ICC) in Paris in the case concerning the power purchase agreement reached by the two entities. Under the agreement, Attarat is the first power-generating company that uses oil shale to produce electricity. Jordan is one of the top five countries in oil shale reserves globally, estimated at 70 billion tonnes.

The arbitration request sought to reach a ruling on the existence and value of grave deception in the set electrical tariff agreed upon by the two companies, and arrive at a decision on NEPCO’s right to terminate the contract unless the alleged “deception” is removed.

The agreement was signed during prime minister Abdullah Ensour’s tenure, in 2014, at an estimated cost of $2.1 billion; it stipulated a 470-megawatt capacity providing up to 15 percent of the Kingdom’s electricity requirements.

The project is owned by Attarat Power Company, a coalition of three companies from China, Malaysia, and Estonia. Construction of the project’s infrastructure began in mid-2017.

Attorney at law and partner at Nabulsi and Associates Zaid Nabulsi told Jordan News that “NEPCO has no legal basis for their case since the government and NEPCO were aware of and agreed to the set prices”.

“Legally, the government cannot claim grave deception because the Attarat Power Company did not cheat anyone. Grave deception is when someone is blindsided, which was not the case. The government was aware of the prices and agreed to them; it is a losing case; there was no cheating,” Nabulsi said.

Expert and economic analyst for oil and energy Hashem Akel told Jordan News that the electricity tariff NEPCO has agreed to was hefty at 110 fils per kilowatt, and that, instead of filing a legal case at ICC in Paris, “the government should have adopted a friendlier approach and negotiated to reach a middle ground”.

Economist and specialist in oil and energy affairs Amer Shobaki told Jordan News that the case was filed at ICC in Paris because of the high value of the contract, which stands at $2.1 billion.

“I do not expect to have any result (from the arbitration) since the government signed and agreed to the prices included in the contracts,” Shobaki said.

He added that in view of the energy crisis in the world, the government should take advantage of Jordan’s oil shale reserves that would secure Jordan’s energy needs.

“Jordan should rely completely on its oil shale reserves to produce electricity, besides using renewable energy. The government should increase the number of power producers who rely on oil shale, so Jordan does not have to import its energy needs from Egypt and Israel to produce power, which would help Jordan maintain its foreign currency reserves and achieve self-sufficiency,” Shobaki stated.

However, a source at the Ministry of Energy and Mineral Resources told Jordan News that since Jordan has a surplus of electricity, it does not need any new projects to produce electricity, not even using oil shale, which “is still a costly source to use to produce electricity, especially in comparison to gas prices”.

“There is no point in using oil shale; it will be more costly to the country than purchasing energy from foreign countries,” the source said.

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