Jiro sy Rano Malagasy (Jirama)

concluded

In January 2005, the Germany company Lahmeyer International was awarded a two-year management contract to operate Jiro sy Rano Malagasy (Jirama), the state-owned electricity and water utility of Madagascar. Jirama is an integrated utility, providing electricity generation, transmission and distribution services, as well as the transport and distribution of water. Lahmeyer was required to improve administrative, technical and trade operations as well as financial management. The Malagasy government retained control over tariff levels. The contract was awarded on the basis of a competitive tender, with Lahmeyer’s bid of 1.8 million euros (US$ 2.3 million) significantly lower than the other bidder (French Firm Compagnie Generale des Eaux bid 4.2 million euros). At the beginning of 2005 Jirama had a notional capacity of 220 MW, of which 40% was from hydro plants and 60% from diesel, but by December 2005 actual generation had dropped to 137 MW due to diesel fuel shortages. Jirama was the sole provider of transmission and distribution services, but did not have a monopoly in generation. Jirama had contracts for purchasing energy with French firm Hydélec and Malagasy firm Fraise, which provided 10% of generation capacity. The company was in severe financial difficulty by the end of 2005. The contract to manage Madagascar’s power utility Jiro sy Rano Malagasy (JIRAMA) came to an end on March 31 and was not renewed. The German group Lahmeyer had been blacklisted by the World Bank and the European Bank for Reconstruction and Development (EBRD) because of its involvement in a corruption scandal with the Lesotho Highland Water Project. None None