It was refreshing to know that one media, your magazine, has understood the complex nature of the renewable energy business beyond producing glittering-headline media coverage. (Is Ethiopia ready to make the best of renewable energy? Nov. 2013).
Today funding green energy in Africa is a buzz word from the world of President Obama to Bill Gates, to the IMF and Rockefeller foundation. For example, the Sustainable Energy Fund for Africa (SEFA), a bilateral trust fund administered by the African Development Bank (AfDB) and whose USD 57 million is bankrolled by the government of Denmark is waiting for reliable partners to support small and medium clean energy and energy efficiency projects in Africa. However, I see two major problems to this end. The first one is countries with immense potential for green energy (geothermal, wind, solar and hydro) do not seem to realize the importance of preparing legally binding tariff regulations. As your article eloquently stated Ethiopia is a classical example. The second is green energy funding such as the one by the US government, Power Africa, are profitable energy deals for U.S. corporations. During his most recent visit to Africa President Obama was accompanied by the CEO of General Electric Jeff Immelt.
Two days after I read your article (Is Ethiopia ready to make the best of renewable energy? Nov. 2013) I heard the news that on Tuesday 19 November, 2013 Ethiopia’s House of Peoples’ Representatives (HPR) has passed a new proclamation that encourages private sector involvement in the energy sector. According to the government media, the new proclamation reestablished the former Ethiopian Electric Agency as the Ethiopian Energy Authority. In your article you argued that “Recently the Ethiopian Electricity Agency changed its name and became known as the Ethiopian Energy Agency accountable to the Ministry of Water and Energy, but with no more effectiveness than its predecessor.” While it was a good move, the missing picture is still the new proclamation does not deal with tariff regulations. I wonder what is holding our policy makers back.
Unattended Safety risks development in the telecom sector in Ethiopia
If one has to go with the global corporate safety index, out of the two telecom infrastructure providers, ZTE scores better than Huawei. Project safety risks under ZTE’s global engagements are better than Huawei. Cost of risk management in the case of Huawei is 1.5 times higher than that of ZTE, according to the latest index.
Of course, this does not mean that ZTE’s projects are risk free. It either means that its risk accounting system is very strong, which means that the company providers risk management due consideration during project planning, or it has better risk management system. In the telecom sector, a risk efficiently accounted is considered less costly and more preferred than otherwise.
Considering their local experiences, the global index seems to rightly grasp the reality. A recent story within the local telecom circle shows that an Ethiopian person died working at one of the first projects of Huawei due to electric shock. Rumour has it that the person died because of a corporate failure to adopt established safety rules popular in the industry, such as using electric shock protection equipments.
In contrast, the risks involved in the case of ZTE relate to some technical hiccups in commissioning some of the project phases it implemented in the country for over 12 years. Since these risks often fall within the industrially acceptable levels, they could not get as costly as death. These, for instance, relate to some of the projects of the school-net project.
A direct comparison of commissioning hiccups with death could show that safety risks are higher in the case of Huawei than ZTE. This seems to rightly fit to what the global index predicts. A more regroups analysis of safety risks could even bring a more striking contrast to the limelight.
Developing countries, such as Ethiopia, obviously account such safety risks in awarding projects to implementers. But what seems to be a major problem in their side is that their safety accounting systems are poorly developed. Hence, they often are seen awarding projects to less cost but high risk bidders. This, eventually, puts safety at inferior position than upfront cost.
In so doing, countries optimise direct benefits at the expense of wider societal safety risks. This seems to underestimate the importance of internationally accepted safety standards in creating a sustainable telecom industry that contributes its right share to the economy.
Global experiences show that projects with safety standards bring more sustainable economic benefits from those poor safety standards. Similarly, project implementers with advanced risk management system are preferred than those with undeveloped system.
Ethiopia seems to have a lot to learn from the global experiences. It needs to account its telecom infrastructure providers for safety risks management and opt for one with better experience. A development that disregards safety is no worth implementing, especially in this era of globalisation.
MA in Engineering Project Management