Monday, July 30, 2001
Rwanda Privatises Power and Water Management
By WAIRAGALA WAKABI
THE RWANDESE power and water utility, Electrogaz, will have a new private managing firm in the first half of next year, an official of the country's privatisation unit has said.
The government wants increased output and a reduction in tariffs once management of the parastatal is in private hands.
The unit has pre-qualified six international companies and is drawing up a contract to be signed by the private managers to be contracted.
"Once finalised, this draft contract will be sent to the pre-qualified companies so that they can take it into account as they make their offers," said Mr Robert Kayigamba, head of the privatisation programme.
The firms include Eskom Enterprises of South Africa, Saur International of France, a consortium of Lahmayer International and Hamburger Wasserwerke of Germany, and another comprising Manitoba Hydro and Roche Ltd of Canada. Others are Tata Electric Supply Company of India and a consortium of four Belgian firms.
Under the privatisation programme, Rwanda will not sell the utility's assets but will turn over the firm to private management. The winning firm will sign a five-year management contract.
Mr Kayigamba said: "Electrogaz's assets like power stations, transformers and water treatment stations will remain state property.
The future private manager will manage this state property and will be responsible for it." Electrogaz produces 25 megawatts of power and imports another 12.5 from Uganda.
The private management company will carry out maintenance, modernisation and replacements. It will be expected to put up new infrastructure in order to meet increasing demand. The cost of the infrastructure works will be charged on government.
Last February, a bidders' conference for Electrogaz was held in Kigali to brief bidders about the parastatal and the country's energy policy.
The private management will be expected to draw up and implement a plan aimed at improving the overall commercial operations of the firm.
A key component of this plan will be to significantly reduce the level of non-technical losses of the company, that is, the difference between the amount billed and the amount collected.
Leakages, system failures, theft and fraud are the main causes of these losses.
Currently, Electrogaz collects only 40 per cent of the amount billed for water and electricity.
With a turnover of nearly 8.5billion Rwanda francs ($20 million), this is a loss of 13 billion Rwanda francs ($30 million) annually.
"The terms of reference for the private operator stipulate that, after five years, the commercial losses for water and electricity should be limited to 5 per cent and 2.5 per cent respectively," a consultant on the privatisation said.
Electrogaz re-launched its activities in August 1994 after many of its employees died in the Rwanda genocide while others fled the country.
The company is owed over $40.7 million by its clients.Only two percent of the Rwandese population has access to electricity.