LEC Clarifies Media Report

11th May 2018

This statement is released in response to inaccurate statements concerning the current LEC management made in the Front Page Africa report of May 9, 2018.

The ESBI management team at LEC is fully committed to working with our Liberian colleagues in LEC in order to improve the operational and financial viability of LEC into the future.

One of our most important priorities is the building of internationally recognized best practice in management skills in our cadre of Liberian management colleagues. In this respect, ESBI has just recently completed a review of the skills and capacities existing in LEC and have prepared a comprehensive training program for LEC’s Liberian managers and an additional training plan that addresses skills gaps in all of LEC’s operational areas.

On a day to day basis we work with all our Liberian colleagues in a spirit of cooperation and trust with the joint aim of making LEC a key contributor to the economic growth of Liberia.

The ESBI management team took management control of LEC on January 8, 2018 after being awarded a Management Services Contract (MSC), under an international open and transparent tendering process. The contract was reviewed and approved by the Government of Liberia and signed by the Chairman of the board of LEC.

Immediately prior to ESBI’s tenure in LEC, for the year of 2017, the corporation had been under the management control of the Interim Management Team (IMT).  The Interim Management Team was hired under the understanding that their terms were limited and as the procurement for the new management contract was pending, they were instructed by the board of the LEC to function as caretaker managers.

When ESBI assumed management of LEC in January 2018, the immediate concerns were to ascertain the financial and operational health of LEC. After careful examination of the financial accounts and operational capabilities of the corporation, it became evident that LEC was in serious financial difficulties on many fronts.

On 8th January 2018, debts owed to LEC totalled US$9.5M. LEC also owed in excess of US$22M to suppliers and other entities. These liabilities included payments for the operation and maintenance contractor at Mt. Coffee Hydro Power Plant, cross border power supplied by the Cote D’Ivoire power utility, and subscriptions to the West African Power Pool, to name a few.

Critically there was no arrangement in place to purchase Heavy Fuel Oil for LEC thermal generation plant during the dry season, with the resulting certainty of LEC having to switch large numbers of consumers out during the 5 month dry season.

In addition, ESBI found that stocks of materials and equipment were almost completely depleted. There were no domestic prepaid meters and an extremely low stock of transformers and conductors, all key elements in LEC’s ability to connect new customers. In addition, LEC’s fleet of transport was in a derelict state with many vehicles off the road for basic maintenance.

As a priority the ESBI team arranged to purchase HFO, with the assistance of the Govt of Liberia, in order to provide power supply through the dry season to avoid sweeping power outages affecting all customers.

The ESBI team also immediately engaged the Millennium Challenge Account, MCA-L, and received approval for the procurement of essential materials, tools, and other equipment to allow LEC to maintain its network and continue to connect domestic customers. In addition, the World Bank and the German Development Agency have agreed to procure much needed prepaid meters to allow domestic customers to be connected.

In the absence of domestic prepaid meters and in support of President Weah’s pro-poor agenda, the current LEC management team introduced a “flat rate” connection for domestic consumers. This flat rate allows domestic customers, who don’t have a meter to get an electricity supply for a monthly payment of US$40 or US$80, depending on their individual requirements. This flat rate approach allows LEC to identify and register these customers on our database. When LEC receives the meters being procured by the donors, we will install those meters in flat rate customer premises and their payment will then be on a prepaid metered basis.

In addition to the provision of materials, tools and equipment to LEC, MCA-L is also funding the rehabilitation of LEC’s Customer Service Centre in LEC’s Waterside office plus the construction of a new Customer Service Centre in Greater Monrovia, in a site yet to be determined. These two Customer Service Centres will be equipped with state-of -the art communications systems to allow LEC to improve its interactions with its customers and make a dramatic improvement in our ability to respond to our customer requirements.

The new LEC management team also engaged with the LEC union and completed the signing of a management/union Collective Bargaining Agreement, which regularises and dictates how the staff and management interact with each other. Significant benefits also accrued to staff as a result of the signing and implementation of the Agreement under ESBI tenure.

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