5 January 2014

Ethiopia: Top Minister Pledges No Job Losses in Eepco Breakup

It has even been noted that the two new companies will require additional labour force

Subsequent to the breakup of the state-owned power utility monopoly, the Ethiopian Electric Power Corporation (EEPCo), there will be no layoffs from the thousands of employees, according to a high ranking minister.

Debretsion Gebremichael (PhD), minister of Communications & Information Technology and responsible for economic and finance affairs with a deputy prime minister portfolio, has assured labour leaders in Addis Abeba that no employees of the now defunct EEPCo should worry about job losses after its breakup into two.

The Administration of Prime Minister Hailemariam Desalegn decided, in early December 2013, to split the 62-year-old firm into two.

The company's infrastructure arm, which sees the construction of power generating assets and distribution lines, would be carried out instead by Ethiopian Electric Power (EEP).

It is a restructured entity to be run by Azeb Asnaqe, an engineer who has been key to the Gilgel Gibe III hydropower project. She is now responsible for overseeing an annual investment of two billion dollars in building dams, including the Great Ethiopian Renaissance Dam,(GERD) with a generating capacity of 6,000Mw electric power.

Another firm emerged from the breakup too. The Ethiopian Electric Services (EES) is tasked with the operation of power distributions and sales.

The company's management has been outsourced to a consortium of three Indian companies-Power Grid Corporation of India, Bombay Suburban Electric Supply and National Hydroelectric Power Corporation-for a two-year management contract worth 21 million dollars.

The new company is responsible for serving close to two million subscribers in 5,163 towns and covering 41pc of the nation's geography.

It is the largest restructuring undertaken since the company was reformed in 1997, when the government decided to separate its regulatory function from its corporate operations.

The EEPCo used to run an interconnect system with 11 hydropower generators and a self contained system, under which it operates one geothermal and 15 diesel generated plants.

Combined, these sources of energy generate 2,022Mw power, of which 91pc of power is generated from the hydroelectric dams. Power generated from these is transmitted through 10,884.23Km of transmission lines.

The EEPCo has had close to 13,000 employees on its payroll, who are now split between the two companies.

"There will not be any layoffs," Debretsion pledged in response to the concern raised by a labour leader during a consultation with senior government officials, held on Saturday, January 4, 2014, at the Prime Minister's Office.

"When deployment comes to an end within one month and half, evaluation will be held to determine the integrity and fairness of the process."

In fact, both of the newly restructured companies need additional labour of close to 4,000 workers, Debretsion disclosed.

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