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BusinessPower Utility breaks METEC’s supplymonopoly

Power Utility breaks METEC’s supplymonopoly

Effectively ending the long-standing electric equipment supply monopoly that Metals and Engineering Corporation (METEC), the now failing military conglomerate, had over the state-owned power utility company, Ethiopian Electric Utility (EEU), for many years, it has openly issued invitations to local manufacturers this week to supply the products, The Reporter has learnt.

METEC was the sole supplier of electric meters, transformers and electric wires to EEU for the past several years. In a press conference held on Wednesday corporate communication director,MelakuTaye disclosed that the electric company has ended the monopoly of METEC. “Previously, we had only one supplier but now we have decided that all the local manufacturers should be given equal opportunity,” Melaku said.

Accordingly, EEU has invited all the local manufacturers to supply electric equipment including electric meters, electric wires and transformers. However, Melaku said that shortage of foreign currency and the limited capacity of the local manufacturers have hampered local purchases. “One of the major challenges we are facing is shortage of foreign currency. The local manufacturers ,too, do not have adequate foreign currency to import industrial inputs,” Melaku said.

In the budget year 2018-2019, EEU collected 7.2 billion birr from the sale of electric power toits customers. Forty percent of the sales goes to the Ethiopian Electric Power, the sole electric producer in the country. According to the report, EEU collected 799.30 arrear payments in the budget year. The company planned to collect 1.3 billion birr. The remaining arrear payment to be collected from customers stood at 513.8 million birr.

Melaku said that EEU is striving to improve its electric power supply service to the supply. “We are replacing the aging electric power distribution network in the capital Addis Ababa and regional towns,” he said.

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In a bid to curb the erratic power supply EEU is undertaking electric power distribution network upgrade projects in Addis Ababa and regional towns. To reduce the electric power supply interruption and ensure reliable power supply, EEU is undertaking a project at acost of 162 million USD, a loan secured from the Chinese government. EEU said that the project is 83.9 percent completed adding that the project would be completed in the current budget year.

The company is also rehabilitating and upgrading the power distribution network in Addis Ababa and seven regional towns with a loan provided by the World Bank. EEU is in the process to start rehabilitating and upgrading the electric distribution networks in WolaitaSodo, Shashemene, Harar, Adigrat, Gondar and Debre Markos towns. The bidding process is underway for the network upgrade projects in the six regional towns.

EEU disclosed that it will start implementing the electric power tariff increment as of December. The power utility company last year introduced a revised power tariff to be implemented in four years. The first increment was introduced last year.

EsubalewTenaw, reform and good governance director with the Utility, said that the EEU would make the second round power tariff increment as of December 2019. According to Esubalew, the most pressing challenge that the company is facing is shortage of finance. “The company is unable to cover its operational cost leave alone capital investments. It has reached at a point where it can no longer provide the service,” Esubalew said. “Before it halt its services to the public, the government last year approved the revised tariff program to be implemented in four consecutive years,” he added.

According to him households that consume up to 50 KWH would not be affected by the tariff increment. He called on the public to use electric power efficiently and avoid power wastage. “The revised tariff rate is progressive and it discourages high usage of electric power and the public should utilize power wisely,” he added.

EEU has more than three million users, 80 percent of them are households. In the current fiscal year, it has an ambitious plan of proving electric power for one million new customers.

Theft has been a critical challenge for the state utility company. Electric power and equipment theft are becoming rampant. “Individuals engaged in small businesses steal power. Electric cables, towers and transformers have been vandalised,” Esubalew said.

There are 156 theft cases which have been reported in Addis Ababa and towns in the vicinity of Addis Ababa that cost the company 18 million birr. “Since May, we have noticed serious organized crime committed on our properties,on a scale that we have never witnessed in our history,” Esubalew said. In the past few months 31 transformers have been stolen in Addis Ababa and its environs costing the company more than 8 million birr.

With the view to modernise its work process EEU is implementing Enterprise Resource Planning (ERP) and International Financial Reporting Standards (IFRS) programs.

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