The Westcor project - a question of equity?

At an SAIEE executive business briefing on 31 July 2009 [1], Eskom's Dr. Pat Naidoo, CEO of the Western Power Corridor Company (Westcor), provided an update on the possible demise of a Pan-African project to harness the renewable hydro-electric energy resources of Central Africa for the benefit of the Democratic Republic of Congo (DRC), the Southern African Development Community (SADC) and the wider African continent.

Dr. Naidoo painted a picture of political factions within the DRC reneging on the country's commitments as a shareholder of Westcor, and unilateral changes by the DRC to its mandate on Inga 3 by cutting a deal direct with resource company, Billiton, and in so doing, pulling the rug from under the feet of the broader Pan-African project.

Subsequently, the matter was on the agenda at the SADC Heads of State Summit in Kinshasa in September 2009, where Joseph Kabila of the DRC assumed chairmanship of SADC. After the Summit, a Business Report article [2] on 10 September 2009 reported that Kabila had said the Westcor project "is still in place, and viable, but will be re-examined so as to involve all the member states". The report further states that when Kabila was asked what the DRC could expect from SADC now that he was its chairman, he replied: "Nothing at all" because the Congolese should rely on themselves.

However, a subsequent article in Engineering News on 12 September 2009 [3], reported that:  "The uncertainty about whether the Democratic Republic of Congo (DRC) government planned to reverse the Southern African Development Community's (SADC's) mandate over the development of the high-potential Inga hydroelectric projects appears to have been lifted, following the recent Heads of State summit in Kinshasa", and that: "Westcor's current shareholders include the electricity utilities from Angola, Botswana, the DRC, Namibia and South Africa [in equal proportion of 20% each], but following the recent SADC meeting it was likely that the governments of Malawi, Tanzania, Mozambique, Swaziland, Lesotho and Zambia could also sign up as shareholders."

In a new article published by EE Publishers on 25 September 2009 [4], Paul Tuson, chief electrical engineer, transmission studies, Parsons Brinckerhoff Africa (PB Power), provides an important alternative perspective to that given by Pat Naidoo as to why the Westcor project to bring power from the Congo River in the DRC may be unachievable in its current format.

Compelling arguments are presented that the current shareholding in Westcor, as well as the new suggestions of other SADC countries (Malawi, Tanzania, Mozambique, Swaziland, Lesotho and Zambia) also becoming shareholders, is fundamentally flawed and unfair.

It is the view of the author (Paul Tuson) that: "The shareholding arrangement in Westcor needs to be reconsidered, and that a more equitable arrangement for the DRC needs to be put in place to compensate the DRC for its energy source."

Following his analysis, Tuson presents a number of far-reaching conclusions that may be necessary preconditions for the Westcor project to proceed and succeed, namely [4]:

• The Westcor project should be founded on the basic economic and financial principle that the ownership of the vast energy resource of the Congo River in the DRC resides with the DRC and the DRC should be compensated in full for this renewable hydro power resource
• Any regional benefits, negotiations, quantity discounts or spin-offs should be welcomed and supported; however they should not contradict this basic premise of ownership
• The current 20% shareholding structure (and any other extended regional agreements) should be reconsidered
• Contributions made from other utilities to the development costs of the project and to the capital of the power station and transmission systems should be compensated, but all future energy income should return to the DRC
• Wheeling tariffs can be negotiated with wheeling utilities however wheeling tariffs are likely to be considerably lower than incomes derived from the current 20% shareholding structure
• The Motraco model, where the participating utilities derive wheeling income from the transmission component of the project only could be considered
• Load requirements from large commodity companies, smelting companies or industrial companies should be included in project planning
• The capacity of the involved utilities to self-fund the Westcor project can be questioned and project debt should be considered in the financial planning for the project

[1]   "Global resource business and DRC politics conspire to sink an African dream", by Chris Yelland, Energize magazine, August 2009
[2]   "Westcor power project still viable, needs review", by Nick Long, Business Report, 10 September 2009
[3]   "SADC reaffirms Inga as a regional project, Westcor may be expanded", by Terence Creamer, Engineering News, 12 September 2009
[4]   "Why the Westcor dream may be unachievable in its current format", by Paul Tuson, Parsons Brinckerhoff Africa, Energize, 25 September 2009

  

"Lighting Design and Application - A practical guide for lighting practitioners"

Brian Rowell is an independent lighting consultant, a former chairman of ILESA and SANCI, a former chairman of the Joint Education Committee of ILESA, SANCI and SALA, and the first president of IESSA, the consolidated Illumination Engineering Society of Southern Africa, which, in 2004, merged the former lighting societies, ILESA, SANCI and SALA, into a single unified body.

The book combines technical accuracy and practicality with an impressive breadth of detail, in a portable, compact and lightweight package.

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