In 1996, the Gambian Government decided to create the National Water and Electricity Company (NAWEC). The company was formerly known as GUC (Gambian Utilities Corporation) and UHC (Utilities Holding Corporation). What was the aim of the restructuring made for and what are NAWEC's main achievements since then?
Yes, the company started under the name of GUC, Gambian Utilities Corporation. The Government at the time felt that the company was badly managed, which is why we went into a leasing contract of management with a foreign company called MSG. We were under management of this company for two years more or less. Then UHC, Utilities Holding Corporation, owned by the Government, was created principally to monitor the activities of MSG making sure they operated in accordance with the contract. This didn't work very well, because the objectives and targets were never realized. The UHC was simply not competent enough to really monitor the leasing company. They did not have the technical competence to do it. As a result, the leasing company was doing a lot of things on its own, since they knew that the holding company was a weak one. Besides, the leasing contract itself was not properly negotiated: MSG was there mainly to operate and collect revenues. Even the maintenance of the network, according to that contract, was to be done by the Gambian government.
The extension of the network, the costs of this expansion and the maintenance were also to be done by the Gambian government. If they extended the network or rehabilitated it, they sent the bill to the government and the public recently pays for it. So, when the military people took over, consumers were already fed up with the system. The network was not maintained. MSE was only interested in collecting money and this was done properly. As a result, the leasing contract was abrogated in 1996. As they felt something had to be done with the utility, they decided to form a limited liability company called NAWEC. The objective was to ensure the efficiency of our services. But today we have to face a problem of scarcity of resources.
Would you please give our readers some Water production and Power capacity figures as well as financial figures like turn over, net profit, number of customers?
Concerning the electricity figures: we have a capacity of 27 Megawatts but because of the age of the generator n°6 we have only 22 MW available for the consumption of our customers. But the demand today is several times more than this. As a result, we are doing load serving on a daily basis. The impact of this on our socio-economic development is really great.
The problems in terms of electricity production seem to come mainly from the main generators in Kotu Power Station, which provide the country with the bulk of its energy needs. What should be done in order to solve those problems and to get the electricity available 24 hours a day?
NAWEC and the Government both have realized that our efforts alone cannot solve the energy problem in this country. Therefore, we decided to be opened to the private sector. Today, studies have progressed in that direction. We are doing the institutional arrangement; a consulting company Stone & Webster funded by World Bank is doing the study. We hope by the end of this year a good environment will be ready in order for the private sector to come in without problems.
It is through this that we hope that the energy problems of this country can be solved. My personal belief is we should not go into full privatisation of the sector. We should rather do it in phases. People should gradually accept the concept. The concept of privatisation is good, I am not opposed to it, but I feel that Gambians would not accept easily a full privatisation process. And the whole objective would be defeated. Therefore, we go in for privatisation but we put it in stages.
First of all, for the energy sector we start with generation. We allowed private sector to help us come in to the generation. The government and the utility will now concentrate on rehabilitation and expansion of the network. By collaborating with international donors we should be able to maintain and to expend the network to increase our coverage level all over the country. Then gradually, as soon as we have privatised the generation sector completely, we will come to the transmission and distribution sectors. But we will do that also in phases. For example, we will give one area not electrified completely to some private companies asking them to put their transmission line and distribution network, supply power and collect money. This will be running in parallel with the government utility. As soon as Gambians will realize that private companies are not here to take their jobs, then we can have the full privatisation of the energy sector. But if we have a full privatisation now, we will run into problems. A year and a half ago in Senegal, they went into a full privatisation process of the energy sector and today, it does not work.
Gampower is an independent power provider. To what extend this company helps NAWEC in providing electricity? Is it a competitor or a partner?
The experience we have with Gampower is very good. For them, coming in the public energy sector won't be a problem. They are contributing a lot to the energy sector: Today their installed capacity is 11 MW and their available capacity is about 7 MW. This is a lot of power considering 22 MW as a whole and that 7 MW are coming from them.
Since we started with them the availability has not been very bad. It is quite a very useful company. Gampower runs independently from NAWEC even if we are part of it. We are executive directors of Gampower but they are running the company of course in consultation with me. It is working perfectly, but unfortunately the contract is coming to an end in one year's of time. Some other investors in France are interested in buying the shares now. So they could expand power production in the Gambia by putting an additional 12 MW power plant. We are working on this and hopefully it might work. If not, Gampower's contract will come to its natural end.
Apart from that, the generator itself is very close to the end of its life limits. In the next 24 000 hours, all the main components have to be replaced. We would rather choose to buy a new set than to do that. That is the state of Gampower.
Recently there was an energy delegation from Taiwan: what are the prospects in that field? Do you think they are potential investors?
They are potential investors. Taiwanese came here on the invitation of the government. A technical mission was sent to assess our needs for electrical energy. This was done in collaboration with us of course. They have expressed the interest in assisting us on a bilateral basis as well as a commercial basis. They are still considering our request. When the president of Taiwan visited here he realized that we needed assistance in the energy sector. He has given his promise that he would do everything possible to see how to assist us both at the level of the government and also the private sector. Today, I was talking to one individual private sector in Taiwan who is a developer of IPP's in many other countries. Since The Gambia was introduced to them, he has shown a lot of interest in trying to develop an IPP here as well. At the level of the Taiwanese government we are also very hopeful that something might come from them.
| Due to the nature of Power Generation, the electricity cost is the most expensive of the whole sub-region. According to you, what has to be done in order to decrease the prices?
This is right, our prices are the highest. This is not sustainable and we have to do something about it. But at this time, the price of fuel is going very high and our capacity is still the same. We cannot increase our network to have a bigger customer base so that we can increase our revenues. Certainly reducing tariffs is our aim and we will implement that as soon as things get better like we can increase capacity and also rehabilitate the network. Today we are loosing about 40% of the power that we produce at Kotu as a result of technical and non-technical loses in the network. It means that one of the big generators just produces electricity for the losses. Therefore, with this background, we do not think we can reduce tariffs now. But if we can address these problems, which we are now very clear with, we will be able to get over these problems very soon.
We have signed yesterday a contract for the study of the greater Banjul area transmission and distribution network rehabilitation and expansion. The study will be done and the detailed engineering design will be discussed and the dead line put at mid-December. In mid-December we should have the document ready and we hope that we would not have any problems in order for us to start the implementation in January. EDF also is here. They told me there was no reason why they cannot move very fast with us to realize the project in January. Hopefully, in January we shall see the full-scaled rehabilitation of our network. Therefore we will make a lot of savings from the 40% loses that we have and if we are able to put in even a 6 MW power plant we should be able to reduce tariffs by 10% almost. That is my objective. If we do not have our problems solved, with the level of crisis of fuel, today, it won't be possible for us to reduce tariffs. Today, even with the high tariffs we have, we still find it very difficult to pay for fuel and our other expenses. I have lot of essential spare parts that I should buy for the system but we don't have money. I think that you are aware of the increase of the price of fuel. In 1998, we spent 74 million Dalasis on fuel, in 1999, 83 million Dalasis and for the first eight months of the year 2000 we have spent 93 million Dalasis on fuel. It means that by the end of the year we would have spent 139 million Dalasis on fuel, which more than two times the fuel we would have spend during the year 2000. If our source of income remains the same it will be very difficult for us to take care of our other ongoing operations.
What about the diversification of the Gambia's sources of energy like solar power supply for example?
On a big scale it would be difficult. The initial cost of the system that we need to put in place for tackling the energy of the sun is very expensive. But in a small scale we are thinking about implementing it. Some of the small villages in fact could benefit from the sun. It would be less expensive for them. We are pursuing this idea vigorously with the assistance of a company from the Netherlands. Those companies are already established here and we are giving them the support for electrification of small villages in rural areas. We are using the sun already to power many of our small hospitals and schools in the provinces.
Does the electrification of the towns and village's part of the National Electrification Master Plan launched few years ago? The main purpose of this plan was to provide the entire country with electricity. What are the latest developments concerning this project?
This is our aim and objective to electrify the whole country. Today, apart from the program we have for the urban areas, the Greater Banjul Electrification Program, we have also a program as you said for the rural areas. In those rural areas, there is already a rural electrification program, which has gone very far. We are now approaching the implementation of the project. It is going to electrify 46 villages in the provinces at a total cost of $16 million US. This project will be supported by three agencies ADB, Badia and IDB. Badia is taking the generation, IDB the transmission and distribution component and ADB will find the supervision of works. We are hopeful that this project, if all goes well, might start in March 2001.
NAWEC expected a significant growth in its customer-base by the turn of the century. Did the number of customers reach your expectations?
Certainly because it has been always very difficult for us to satisfy the demand. Today, in industrial and commercial sectors, the amount of applications we have here that we cannot satisfy because we don't have the capacity is about 15 MW. This is without speaking about domestic consummation. Our coverage level for domestic consumers is very low, around 20-25% of population, which has access to electricity. We have already 22 MW of production but we need 80 MW to supply the existing demand for this year and the year 2001. You might have seen that the coastal road is being done. This is an important road. Once this is done you will see unexpected development coming along this road. If you have a look at the master plan for development of the tourism industry, you will see that a lot of five stars hotels have been proposed to come along this road. Unfortunately there is no electricity there and there is no water in these areas. We are thinking about stringing our lines along the coast this year. When the investment plan for tourism development was launched along the coast, we did the calculation and estimated the consummation to be around 25 and 30 MW for this area only.
According to you, what will be the main challenge you will have to face in the next future as Managing Director of NAWEC?
First of all, the main challenge will be to satisfy the demand with affordable prices. And this is not easy. We have also to put our network in an integrated form. This will allow us to distribute electricity at a lower cost. The idea of the latest African Powerful Project is to connect member states in West Africa. In The Gambia, we have to use our hydroelectric potential to power this grid. There is a lot of potential on the rivers. On this river alone we have 88 MW potential. In Sierra Leone, 500 MW potential, and in Guinea and Guinea Bissau a lot too. We are thinking that the best and final way to solve our energy problem is to cooperate at a regional level. Studies have already been done to connect South Africa and North through a 400 KV line. Nigeria, Benin, Ghana are already interconnected and we are thinking about the West African part that would eventually connect the west African member states. As we are looking how to connect North, South and West, we are on the right track. This is the challenge of the coming years.
What could be your final message to potential investors?
There is one more thing I would like to say to foreign investors. This is peculiar to The Gambia alone and it is not an advantage that is shared by other neighbouring countries: our country is more or less in the middle between Senegal and Guinea. We could easily supply electricity cheaper to these two countries more than they can do. A lot of investors like ESKOM saw this advantage and are very interested in coming here. We already signed with them a memorandum of understanding and we will work very hard to form a partnership. The idea that they eventually have is to build a big Thermal plant here. Sometimes when the levels are low, you don't have much power. Then Thermal Power Station supplements. If we have a big Thermal Power Plant here, we will be able to sell electricity to The Gambia but also to the West African countries. This definitely has to come. Otherwise we won't be able to solve our energy problems on the continent. |
NATIONAL WATER & ELECTRICITY COMPANY