European Utilities Companies Create B2B Portal

ROME (05/30/2000) - A group of 12 major European utilities companies have agreed to create a European business-to-business (B2B) portal for procurement exchange, Italian electricity company ENEL SpA announced yesterday.

The companies will create an electronic market for buyers and suppliers in the utilities sector, initially focusing on the electricity and water industries, ENEL said in a written statement. The consortium intends to begin online exchanges in the third quarter, making use of online auction mechanisms, ENEL said.

The portal will be operated by a specially created independent company 80 percent controlled by the signatories of the agreement, the statement said. The remaining 20 percent will be available for industrial and technological partners, suppliers and management.

So-called "coopetition portals" can reduce transaction costs by up to 70 percent and sales costs by up to 50 percent by streamlining the procurement process online, according to Peter Graf, vice president for Internet technology at Germany's SAP AG.

"In coopetition, competitors get together to create a marketplace," Graf told the Sapphire conference in Berlin last week. "It helps them to work together when purchasing but lets them compete again when selling."

The companies participating in the project with ENEL are EDF of France; RWE of Germany; Spanish companies Endesa and Iberdrola; Electrabel of Belgium; British companies United Utilities, Scottish Power, Northern Electric and National Grid Company, along with Vattenfall of Sweden and NUON of the Netherlands, the statement said.

The portal will use an independent and open technological platform with the aim of integrating online procurement practices of participating companies and of allowing broad access to suppliers, the statement said.

Overall procurement by the 12 companies currently amounts to about 30 billion euros (US$28 billion) per year, with a large portion of that amount expected to move on to the new portal, ENEL said.

ENEL, the world's largest traded utility, is heavily involved in the Internet and telecommunications. The company has a 51 percent stake in Italy's Wind SpA telecommunications company and, on May 10, announced plans to introduce a home networking infrastructure to more than 27 million Italian homes as part of its digital meter project.

ENEL, in Rome, can be reached at +3906-8509-7652 or on the Internet at http://www.enel.it.

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