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On December 9, the 60 year old state utility Ethiopian Electric Power Corporation (EEPCo) was officially split into two in hopes of boosting the electric company’s performance.
To be sure there were issues of concern that needed to be addressed at EEPCo. Yet, over the past 12 years, Ethiopia’s power generation capacity has tripled under the helm of Meheret Debebe who serve the corporation for the last 16 years.
So it came as a surprise when Meheret, whom many consider visionary and who helped make EEPCo internationally competitive, was apparently sacked which sure sounds like ‘letting someone go’ or ‘laying someone off’ or other phrases we use to make things that are unpleasant sound nicer.
The question is why? Over the past decade, Meheret helped the corporation make a noticeable difference in power production.
In the next three years, the corporation plans to generate 10,000MW boosting it from the current estimates of 2,000MW of power generation capacity. EEPCo’s ambitious plans have also made it one of the most prolific federal entities in terms of new endeavors as it seeks to dramatically expand its power producing capability.
Splitting the corporation might help it to become more efficient and certainly Azeb Asnake, the new CEO of Ethiopian Electric Power, has an impressive resume but when a team is winning games why fire the coach? Meheret has proven management capability to handle the mega hydroelectric dams and transmission lines that the nation is in the process of building and how getting rid Meheret makes the power corporation more efficient remains to be seen.
In my view the board totally failed by not appointing Meheret as the head of the company.
Debretsion Gebremichael Board chairman of EEPCo defended the Board’s decision to remove Miheret from his position and 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,” he said during a press conference. “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 for appointing the new management. Employee satisfaction is subjective, unless there have been many documented cases of disciplinary problems or quantitative surveys or management had gotten wind of low staff morale then really the board should base appointments on performance and experience. In other words if the management ‘ain’t broke don’t fix it.’
EEPCo’s restructuring has been a work in progress for a long time. EEPCo, along with foreign consultants, has spent years researching ways to make the power utility more efficient. The new plan calls for EEPCo to spread out and diversify by making more power plants and ways to distribute the power more easily and efficiently. Based on the new scheme, the corporation will separate working responsibilities, including construction and transmission, which is expected to help them work quicker and save electricity while eliminating supply problems.
The other entity the Ethiopian Electric Services will be managed by a consortium of three Indian companies with the Power Grid Corporation of India spearheading the organization. The other two companies include Bombay Suburban Electric Supply (BSES) and National Hydroelectric Power Corporation (NHPC).
Ethiopian Electric Services will be responsible for the 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 USD 21 million, was signed in August this year and lasts for two years with a possibility of a six-month extension.
It was an international bid in which five companies participated despite a government invitation to over 20 international companies in Europe, Asia and the U.S.
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. Ethiopians expect to fully take over the management after the expiry of contract expires.
Moving toward allowing private investors to produce energy and compete along with the restructuring seem positive steps to help get the 10,000 MW of power by the end of the GTP, which is getting closer. However, to do that requires a team with a lot of competent help and putting your best horse out to pasture doesn’t sound like a way to get there.