Pauline Etienne
20 July 2004
Port Louis — The national electricity supplier is at the centre of great discontent. The 5% increase in tariffs as from next month and a conflict around the allocation of a contract are the bones of contention.
Fort George diesel power station is one of the latest built by the Central Electricicty Board in the port area.
The Central Electricity Board (CEB) has not made anyone's day recently. To meet the rise in production costs and the huge investments it has soon to make the Board has decided to increase electricity tariffs by 5% as from 1st August. Moreover, the contract to be allocated for major investments in equipment is leading to protests from one of the companies concerned.
Consumers have reacted badly to the announcement last week that the price of electricity was going up. The Institute for consumer protection (ICP) has already made it clear that this 5% increase is unacceptable They declare that this decision is "a provocation and an arbitrary decision in favour of the private sector."
However, the CEB is keeping its stand and the general manager, Donna Leclerc, has even declared that it was "the very minimum to avoid the financial situation of the CEB getting even worse." She further explains: "Since January 2002, the cumulative consumer price index has gone up by 13%. The price of heavy oil has increased by almost 37% and the main foreign currencies have appreciated compared to the Mauritian rupee. All these factors together have had an impact on the CEB's production costs that have gone up. As a result, the CEB is bound to readjust its tariffs despite its efforts to curb costs."
Three new turbines
The second issue concerns the CEB's intention of investing in three new turbines at Saint Louis thermal station in Bell Village in 2006. The six existing ones are very old and need replacement. They will not be dismantled in case of an emergency where they could still be used.
After the CEB launched the invitations to tender, two companies were retained: Burmeister & Wain Scandinavian Contractor (BWSC) and Siemens. The CEB made its recommendations to the Central Tender Board and this is where the problem arises: BWSC is said to be in a good position to win the contract though its bid is not the lowest.
The CEB is trying to get out of the situation by saying that the contract has not been allocated yet. It maintains, however, that the BWSC bid has a lower final cost. The turbines would be less expensive at Siemens but the CEB is adamant that the final cost will be more favourable at BWSC.
Moreover, the CEB's investments for the coming years do not stop with these turbines. There is growing consumption of electricity and the private producers want to invest to face the growing demand. Two companies are in competition to win the contract for the construction of a central station: Société Usinière du Sud (SUDS) and Fuel. Their first proposals - Rs 3.5 billion and Rs 2.7 billion respectively - do not fit with the CEB's financial means and are considered too expensive.
More particulars requested
As a result, no decision has been made and both companies are expected to give more explanations on their proposals. If SUDS obtains the contract, it will have to make changes. First, all the sugar activities of the company - particularly of two factories in the South, Riche-en-Eau and Mon-Trésor-Mon-Désert, which would close down - would be centralised at Savannah. As a result, the sugar-producing factory in Savannah would have to expand. All this would finally cost some Rs 4.5 billion.
Work on the construction of the station could start within the next six months in Savannah if SUDS gets the contract and the first production line could start as from October 2006 - the second one would then be ready in October 2007.
The decisions that the CEB has to take are not easy: on the one hand, it has to be a profitable company; on the other it does not have much choice considering that some decisions are influenced by world events like fuel prices and the very recent EU announcement on sugar prices
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