Ethiopia splits state owned giant public utility into two

Tesfaye Ejigu

The government in Ethiopia split into two the Ethiopian Electric Power Corporation (EEPCO), one of the state owned giant public utilities and renamed it the Ethiopian Electric Power Office (EEPO) and Ethiopian Electric Service (EES). The two are tasked to undertake what industry analysts say is an over ambitious plan of becoming an international company. The government says it decided to split EEPCO after three years-long study and consultation with an international consultant.

“The corporation has to get modernized by the process Classification Framework (PCF) to meet the widening electric service demand,” Dr. Debretsion G/Michael, Ethiopia’s Deputy Prime Minister and Board Chairman of the now split EEPCO, told journalists at a press conference on Tuesday Dec. 18th. He added EEPCO could not carry out all the various responsibilities unless it is restructured in a way it upgrades its services. Dr. Debretsion further said the corporation was on a transitional phase since last August.

According to the new arrangement, Power Grid Corporation India (PGCI) took the management of the Ethiopian Electric Service (EES) on a two and half year contract. According to the contract, PGCI will carry out power feasibility studies to determine the highest needed voltage power capacities of transmission lines. The company won the contract for 21 million USD.

The second half of EEPCO, the Ethiopian Electric Power Office, (EEPO), will be headed by Azeb Asnake, former project manager of Gilgel Gibe III hydroelectric power project, which is expected to go operational soon.

However, some industry analysts worry that the split will have human resource management concerns. Employees, especially on top management level will lose jobs, even if there are over 4,100 vacant positions to be made available as a result of the split. Currently, EEPCO has 13,372 employees. EEPO needs 5,600 workers, while EES needs 11,728 workers. Property sharing among the two companies has already been in effect. Dr Debretsion indicated “the issue of who pays which debt has already been stated clearly.”

According to Dr. Debretsion, PGCI’s services will proceed under quarterly evaluations. Key Performance Indicators (KPI) measurements such as finance, customer satisfaction, trouble shooting, automation, and human resource development are employed to evaluate PGCI’s undertakings.

Established in 1989, PGCI is engaged in the power transmission business in India and runs 150 substations.  According to the official website of the Corporation, about 45% of the total generated power in India is wheeled through PGCI. Its Ethiopian counterpart, however, generates all of the power produced (at the transitional phase of the contract) for the national grid and administers all of its transmission lines.

Currently, Ethiopia is the biggest power exporter in the horn of Africa and is aiming to be one of the continent’s biggest exporters upon completion of the construction of several ongoing hydro power projects. The government is working on its ambitious plan to make the power sector one of the major export earners for the country. However, EEPCO is best known for its inefficient handling of power distribution, and chronic power cuts. There was a minute long black out during the press conference, too.

 Photo: Addis Standard/Archive