Comorienne de d’eau et de l’electricite (CEE)

cancelled

In January of 1998, the Government of Comoros (GOC) awarded a lease contract for an indefinite period to Compagnie Generale des Eaux (CGE), or Vivendi (later renamed Veolia in May of 2003), to rehabilitate, operate, and maintain Comorienne de d’eau et de l’electricite (CEE), the state-owned power and water utility in the archipelago. CEE was formed in 1997 following the bankruptcy of the former Electricity and Water Company of Comoros, Eau et Electricite des Comores (EEC). Total generating capacity in the Comoros Islands was 16-MW for a population of around 544,000. The total estimated project cost was FF63 million (US$10.9 million). Caisse Francaise de Developement (CFD) of France was providing a FF57 million (US$9.9 million) loan on concessional terms to the government of Comoros. The World Bank provided a US$11.4 million IDA loan in 2001 as part of the Infrastructure, Water and Environment Project which was subseqently canceled in 2003. The contract had led to improved management and delivery of water services in Grande Comore by early 2001. The private operators had established a tariff system and were successfully collecting payments from users. However, in December of 2001, Vivendi withdrew from the contract after the authorities failed to help CEE pay off its debts to an oil company and pressure a key public client, Societe Comorienne des Hydrocarbures, to pay its Cfr650 million (US$1.17 million) debt to CEE. CEE had requested the government pay part of its debt to enable it to continue to buy diesel and supply power to the islands. However, at midnight on December 5, 2001, when the oil was exhausted, the nation was plunged into darkness. The Comoran government had taken over CEE and appointed a provisional transitional management committee as of December 2001.