Multi-service company : Beware of private monopolies
Vigilance against the creation of private monopolies and the risk that multiservice companies in less attractive regions will not attract private operators! This is the main recommendation of the Competition Council regarding the grouping of electricity, drinking water, and liquid sanitation services under the aegis of a single operator in each region. This will lead to the creation of local distribution monopolies, which certainly seem justified by the pooling of committed means and resources, and will therefore result in the optimization of distribution investment costs. «However, within the framework of the PPPs provided for by law, the creation of private monopolies must be avoided», warns the council. To this end, it calls for contracts to be properly framed to prevent the risk of abuse. And to take account of the fact that not all regions have the same potential. This will «prevent public operators from being the only ones involved in less attractive SRMs (Regional multiservice companies)». Law 83.21 on regional multiservice companies provides for the capital of these companies to be opened up to the private sector, with the Government holding at least 10%. In other words, private investors can hold up to 90% of these companies’ capital. State-owned enterprise and agencies, including the National Water and Electricity Board (ONEE), as well as the local authorities concerned by the scope of intervention of the Regional multiservice companies.
«The reform introduced by Law 83-21 is commendable, as it opens up prospects for the development of national champions capable of exporting their expertise», said the Council. In its view, the creation of Regional multiservice companies with a contribution from private capital will make it possible to meet two major imperatives. Firstly, to mobilize the financial resources needed to meet the major investment programs required in the distribution segment, particularly in terms of infrastructure. This will secure supply, expand, and improve service quality. Secondly, the contribution of the private sector to the Regional multiservice companies will introduce a modern management approach likely to improve, among other things, the performance of networks and the quality of service in commercial management.
Management of distribution services will be entrusted by the delegatee to the Regional multiservice companies via management contracts concluded by mutual agreement. These management contracts will be entered into for a fixed term, with the possibility of renewal. They will be subject to periodic review at least every 5 years. These Regional multiservice companies will benefit from the availability of all assets and resources allocated to the management of this public service at regional level. This will ensure that they have the resources they need to accomplish their mission.
Khadija MASMOUDI
