The reform to separate power plants and grids in China took a historic step with the transfer of Jianbi Power Plant in Zhenjiang of East China's Jiangsu Province from Jiangsu Power Corporation to China Guodian (Group) Corporation yesterday.

The two companies signed an agreement yesterday in Nanjing, capital of Jiangsu Province, to transfer all assets and personnel of Jianbi Power Plant from Jiangsu Power to China Guodian Group.

Jianbi power plant, the biggest one in China in the 1980s, has a capacity of 1.73 megawatts and about 400 employees. It generated 11,276 megawatt-hours of electricity last year.

"This is the first handover of power plant assets, finance, and personnel from the former State Power Corp, to new power generation groups and marked a historic move in the separation of power plants and grids," said Fan Quanxi, deputy director general of the administration officer of the State Grid Corporation of China (State Grid) at a press conference in Beijing.

According to the reform scheme of China's power industry announced in December, the country will separate all the power plants and grids from the former State Power into two grid companies and five generation businesses to break up monopolies, foster competition and improve efficiency.

State Grid was authorized to be in charge of transferring assets and personnel of about 500 power plants under the management of provincial power corporations to the five newly established power generation firms.

The company finished transferring the management and human resources authorities of 500 power plants in March, and was expected to finish the separation with the transfer of assets and personnel in June.

But it has been facing great difficulties in handing over assets and personnel, as the asset structures are very complex and the handover involves welfare and insurance considerations for employees.

With the signing of yesterday's agreement, the progress to transfer the rest of the generation facilities is expected to speed up.

"It will set an example for the future separation," he added.

According to Wang Hui, an official with State Grid, her company might finish all transfers by the end of the year.

(China Daily September 4, 2003)