EEPCO Split Official, Two New Entities Go Operational

Ethiopia made official the split into two independent entities of the state utility Ethiopian Electric Power Corporation (EEPCo).

At a press conference yesterday, Deputy Prime Minister Debretsion Gebremichael, minister of Communications and Information Technology, said the newly formed companies, namely Ethiopian Electric Power and Ethiopian Electric Services, have gone operational this week.

Ethiopian Electric Power is tasked to undertake and oversee the country’s power projects including the mega hydroelectric dams and transmission lines. The company will be headed by Azeb Asnake (Eng.) who is appointed as CEO by the board of directors.

Azeb served as project manager of Gibe III, a 1,870 MW hydroelectric dam project currently underway on the lower valley of the Omo River. The dam is slated to go operational in September 2014.

Ethiopian Electric Services will be managed by a consortium of three Indian companies with Power Grid Corporation of India spearheading the management. The other two companies include Bombay Suburban Electric Supply (BSES) and National Hydroelectric Power Corporation (NHPC).

Ethiopian Electric Services will be responsible for operations, distribution and sales of electric power led by its new Indian CEO V.K. Khare. The mother company in India will oversee the activity.

The management contract, worth $21 million, was signed last year and lasts for two years with a possibility of six months extension, Debretsion, who will serve as board chairman of the two companies, said.

It was an international bid in which five companies participated despite a government invitation to over 20 international companies in Europe, Asia and U.S, he added.

“We wanted an international company with proven experience to modernize the service delivery and undertake the country’s ever expansive activities in the power sector,” the minister explained.

According to Debretsion, payment to the Indian consortium is subject to the performance and objective results which will be reviewed every three months with a possibility of termination in case the performance falls below 60 percent.

The company’s performance will be reviewed on the basis of financial success, customer satisfaction, operational efficiency and capacity building activities.

The top management is made of 22 individuals, out of which five are Ethiopians and the rest are Indians. Ethiopian’s expect to fully take over the management after the expiry of the contract.

“The aim is to have knowledge transfer and finally take over full management,” the minister said.

Recruitment of middle level management also began this week. The minister said all positions will be filled in a competitive manner and downplayed fears of employee layoffs of the now defunct EEPCO, numbering 13,372.

“The new companies require 17,484 employees. So, we will have to recruit additional 4,100 workers from the market,” he said. The recruitment is expected to be finalized over the course of two months.

EEPCO was established 16 years ago with Miheret Debebe serving the corporation as its CEO. His absence from the management of the new companies came as a surprise for some. However, Debretsion defended the Board’s decision to remove Miheret from his position and instead opting to appoint Azeb as CEO of Ethiopian Electric Power.

“Although the board has the power to appoint the top managers, we instead consulted with employees of EEPCO,” Debretsion said. “They are happy with our decision to remove the old management and have welcomed the new appointees.”

According to the minister, education background, experience, leadership capacity and employee acceptance were used as a criteria to appoint the new management.

“As you know, Azeb proved her capabilities leading a challenging and complicated project of Gibe III, which is now nearing completion,” Debretsion said.  

Source: Fana Broadcasting Corporate (FBC)