Societe de Distribution d'Eau en Centrafrique (SODECA)

cancelled

In September of 1991, Societe de Distribution d'Eau en Centrafrique (SODECA) signed a 15-year lease (affermage) contract with the government of the Central African Republic. The utility was split into two entities, with the creation of an operating company (SODECA) and an asset-owning company Société Nationale des Eaux (SNE). At the time of the contract signing, SODECA supplied three million cubic meters of water per year to 10,000 customers and SNE was virtually bankrupt, with a negative equity equivalent to 50% of sales. SODECA was to manage all aspects of the Central African Republic's water service, but the state, through SNE, was to have responsibility for general policy in the sector, the management of water sources and the supervision of SODECA. Under the authority of the ministry responsible for water, SNE and SODECA were to fix tariffs and modify them according to an agreed formula. French company Bouygues (through its local water subsidiary, Saur Afrique) held a 51% stake in SODECA while the state held 25% and local private individuals held the remaining 24%. SNE remained 100% state-owned. Saur International was to invest on behalf of the asset holding company during the 15 year contract for the repair of pipes. By 1995, the number of employees at the utility was at only 79% of its 1991 level after the personnel of SNE and SODECA had been merged. The indicators of productivity of labor pointed to an improvement in performance compared with the situation before privatization. The financial indicators also denoted recovery from a starting-point of near-bankruptcy in 1991. The principal operating indicators also showed an improvement, although this observation was not qualified. The turnover from water sales soared to around 2.5 billion CFAF in 1995, from 1.5 billion in 1992, the first year of private management. This rise stemmed partly from a tariff increase, which dated only from May 1992, but mostly from works carried out for the account of the asset-owning company, amounting to approximately 1 billion francs in 1995. In April 2001, Saur withdrew from the project reportedly because government agencies accumulated increasing debts to SODECA. The management of the company returned to state control. None None