The Central Electricity Board (CEB) is raising the alarm. It is in an extremely difficult financial situation and the consumer may have to pay the price for this. The increase in oil products on the international market and the bad management by the former government are the reasons for this situation, say the managers. They might have no other choice than to raise tariffs in the near future.

The CEB chairman, Patrick Assirvaden, does not hesitate to castigate the former regime for having caused such chaos at the CEB. According to him, the institution has been undergoing accumulated losses of Rs 2 billion between 2000 and 2005. And he warns: ?If nothing is done, the additional deficit will be up to Rs 1.3 billion.?

He goes further with his criticism saying that the former managers handled the stock management in a catastrophic way. The new chairman finds it unimaginable that stock representing Rs 1 billion has been blocked ? since 2001 for some of the products. ?We have to reduce our stock, thus freeing the capital blocked there,? he explained.

Moreover, he criticised the way a loan from the French banking institution, ADF, was reimbursed by the CEB. He said the Mauritian institution should have dealt for a revision of the interest rate when the franc was replaced by the euro. The purchase of SAP software by the CEB for Rs 150 million is also part of the wastage denounced by the new chairman.

Pragmatic and realistic chairman

Hence, the CEB announced it would be starting a recovery programme to try and get out of this financial crisis. First of all, the chairman said he had stopped the construction project of the new CEB headquarters in Ebène. Projects not considered essential for the moment are being put aside until the situation allows their realisation. The chairman appears pragmatic and realistic: ?We do not have any money. We can?t afford such an investment for the moment.?

The company is also thinking of implementing a new policy to reduce the risks of exchange rates impacting on the price of oil products. Losses linked to the exchange rates reached Rs 384 million for 2004 and Rs 36 million for 2005.

But the biggest saving the company should make to find its way out of the crisis is to reduce its heavy oil consumption. As oil prices have been skyrocketing during the past few months, the production costs of the company have escalated. They now cost the company Rs 2.4 billion each year.

As a result, the company is exploring new methods of producing electricity. Coal seems to be the first choice. The CEB has already sent invitations to tender for the construction of a new coal power plant at Montagne-Jacquot.