Comment & analysis

Power privatisation in Cameroon, the Chad oil pipeline and skewed development

Akong Charles Ndika

http://www.pambazuka.org/en/category/comment/20260

Printer friendly version

All over Cameroon, dark clouds are giving way to blue skies. But while the rains are ending, consumers are increasingly worried about their electricity supply and the anticipation of blackouts is a long way from becoming history. In the last three years, power supply has been very erratic. In this connection, the privatised utility, AES-SONEL, is talking-up prospects of investments that are afoot to turnaround the state of events. And amid the uncertainty, Sino-Cameroon relations are taking a twist towards dams. The head of state, Paul Biya, in September flew home with a baggage of dams ready for Chinese financing. These include the construction of three mini-hydropower plants by China International Water and Electrical Corporation (CWE) on the rivers Ntem, Nja, and Kadey. However, beyond government's interest in dams lies a minefield of equity and sustainability issues. Who are the actors and what are their true motives? Are their interests aligned with sustainable development?

The privatisation of electricity provides a background to comprehending some equity issues surrounding the proposed projects. The process, masterminded by the World Bank, was dispossessed of public scrutiny and participation. The recommendations of the International Finance Corporation's consultant - the private sector arm of the World Bank - blueprinted the privatisation of the National Electricity Co-operation (SONEL) in 2001. In the recommendations that were fleshed into a concession agreement, the construction of a big dam over the river Lom-Pangar was mandated to AES SIRROCO: a US based corporation. However, the Lom-Pangar issue predates privatisation. The French - enamoured by the project in 1990 - contracted the consultancy Coyne et Bellier, to carry out a feasibility study on the dam. The study was motivated by the relation between a quasi-owned French company, Alucam and SONEL. Alucam's intent to double its aluminium production capacity depended on cheap hydropower.

* Read the rest of this article by clicking on the link below.
CAMEROON: POWER PRIVATISATION, THE CHAD OIL PIPELINE AND SKEWED DEVELOPMENT
Akong Charles Ndika
All over Cameroon, dark clouds are giving way to blue skies. But while the rains are ending, consumers are increasingly worried about their electricity supply and the anticipation of blackouts is a long way from becoming history. In the last three years, power supply has been very erratic. In this connection, the privatised utility, AES-SONEL, is talking-up prospects of investments that are afoot to turnaround the state of events. And amid the uncertainty, Sino-Cameroon relations are taking a twist towards dams. The head of state, Paul Biya, in September flew home with a baggage of dams ready for Chinese financing. These include the construction of three mini-hydropower plants by China International Water and Electrical Corporation (CWE) on the rivers Ntem, Nja, and Kadey. However, beyond government's interest in dams lies a minefield of equity and sustainability issues. Who are the actors and what are their true motives? Are their interests aligned with sustainable development?

The privatisation of electricity provides a background to comprehending some equity issues surrounding the proposed projects. The process, masterminded by the World Bank, was dispossessed of public scrutiny and participation. The recommendations of the International Finance Corporation's consultant - the private sector arm of the World Bank - blueprinted the privatisation of the National Electricity Co-operation (SONEL) in 2001. In the recommendations that were fleshed into a concession agreement, the construction of a big dam over the river Lom-Pangar was mandated to AES SIRROCO: a US based corporation. However, the Lom-Pangar issue predates privatisation. The French - enamoured by the project in 1990 - contracted the consultancy Coyne et Bellier, to carry out a feasibility study on the dam. The study was motivated by the relation between a quasi-owned French company, Alucam and SONEL. Alucam's intent to double its aluminium production capacity depended on cheap hydropower.

The history of this dam-smelter relationship unveils disheartening equity concerns. Before the privatisation of SONEL, Alucam was paying 5CFA/Kwh for electricity against 50CFA/Kwh for low voltage consumers. In this connection, a disproportionate amount of taxpayers money was going into private pockets as subsidies. Added to this, the government has contracted the Environmental Impact Assessment (EIA) to a French consortium – raising questions about the extent to which government will go to making ALUCAM competitive, no matter what the real cost of electricity.

Besides, the commencement of the EIA debunks government's assertion to fine-tune the project in line with the globally respected recommendations of the World Commission on Dams (WCD). The WCD posits that public acceptance should prime the decision-making process and mechanism through which a dam emerges as an option. In addition, the WCD underscores that the process must be inclusive, transparent, open, recognise rights, address risks, and safeguard the entitlements of all groups of affected people. Furthermore, this should be ensued by a comprehensive option assessment through which all alternatives to dams are explored and objectives clearly defined. In the assessment process, social and environmental aspects should have the same significance as economic and financial factors. However, the decision to build the Lom-Pangar dam had already been taken without any comprehensive and participatory option assessment even though Cameroon is blessed with unrivalled energy sources through which a sustainable electricity future can be pinned on. The input solicited from the affected communities and public at large by the EIA team is primarily within the parameters of developing resettlement options and mitigation measures.

There is an assertion that if you neglect history, you won't make sense of the present or be able to shape the future. The power politics of Cameroon fits this assertion. It seems as if the problems that have emanated from heavy dependence of the electricity sector on hydropower have not taught the government to diversify the power source. About 90% of Cameroon's electricity comes from hydropower plants. Moreover, the major plants, which include Song loulou and Edea, are sited on the Sanaga Basin. It is worth noting that this basin is undergoing severe hydrological stress, a situation that has culminated in protracted power outages, which severely affects livelihood development. Furthermore, studies conclude that this stress has been going on even before the beginning of the last decade. Ironically, the envisaged Lom Pangar dam is sited in the Sanaga basin.

One interesting issue the Lom-Pangar dam unveils is the World Bank's skewed development politics in Africa. How does the Bank scale its priorities? Apparently, the Lom-Pangar and the Chad-Cameroon pipeline projects provide an insight. The $3.5 billion World Bank sponsored project pipes black gold from the oil-rich Doba region of Chad to the Atlantic coast of Kribi, Cameroon. The environmental-destructive 1070 km long pipeline traverses several fragile ecological zones, particularly the equatorial forest in the east where it is envisaged that the Lom-Pangar dam will be. As such, the Deng Deng forest located close to the Lom-Pangar river is reserved to compensate for the adverse environmental impacts of the project.

However, the fate of this ecological reserve hangs in the balance. The construction of the Lom-Pangar dam would adversely affect the reserve. In this light, the World Bank's Inspection Panel report warns that the construction of the dam would be a serious violation of the Bank's Operational Policies and Directives. But stubbornly, the Bank is attempting to engage in the project. Several high profile Bank officials have been visiting Cameroon to explore ways to resolve the electricity crisis. The dam occupies no less a position in their choice of options. Retroactively, the privatisation recommendations congenially incline the bank to finance this white gold project.

Meanwhile, the Bank's position on the conflict surrounding the Lom bridge serves as a lens on the Bank's priority setting. The bridge, constructed by the consortium COTCO to ease the passage of equipment during the pipeline project, was seen by the villagers as a rare development fallout of the project. Consequently, when COTCO wanted to destroy the bridge at the end of the construction phase as specified in the Environmental Management Plan, the villagers protested. This erupted into conflict between the consortium and the villagers. Against the expectations of the villagers, the Bank sided with COTCO and ordered the destruction of the bridge. Interestingly, the Bank placed environmental considerations in front of the development needs of the poor villagers. According to the Bank, the bridge would facilitate poaching.

The Bank's bliss with big infrastructure projects like the Chad-Cameroon pipeline predicates upon a skewed high risk, high reward strategy. Now that the Lom-Pangar dam threatens the survival of the Deng-Deng forest, will the Bank put environmental considerations ahead of development or will the Bank side again with the marauding multinationals and fund the project?

On the other hand, electricity privatisation is in shambles. The privatised utility AES-SONEL has failed to live up to the expectations of privatisation. According to energy intelligence, AES can fund only half of the $500 million required to make electricity supply reliable in the next five years. On the sideline, as a fruit of the president's visit to china, the Chinese have loaned the government 30 billion CFA to construct three mini hydropower dams in the south of Cameroon. Meanwhile, the recent entry of Cameroon into the Central African Regional Power Pool by the AES general manager, also reinforces the company's interest in the dam. In line with NEPAD's centralisation agenda, the power pool cables the way for AES-SONEL to market cheap hydropower to other countries within the sub-region.

Recently, the head of state created a national committee to address the problems facing the power sector. This is a laudable initiative. However, it raises several points for interrogation. How inclusive will the committee be? What criteria will be used to select the members? What will the role of civil society be? Who will the committee be accountable to? How transparent will the deliberations be? Above all, will its mandate be limited to supplementing investment efforts or will it extend to rethinking the whole privatisation option? It is imperative for all stakeholders to come together to address not only the urgent investment needs but also the fundamental crisis of governance rocking the sector. The crucial question begging an answer is how can genuine transparency, accountability, and participation be mainstreamed in power decision making. As the Cameroonians wait for dams, they should note that their true cost never appears on the balance sheet.

* Akong Charles Ndika is an Energy Policy Analyst with Global Village Cameroon