Privatisation: MPs want more energy, flexible laws

Members of the Chamber of Deputies’ Standing Committee on Economy and Trade have urged the government to increase electricity supply and adopt an industry-friendly regulatory framework. The legislators made the observations yesterday during a meeting with officials at the Rwanda Development Board (RDB) during which they shared their findings from a three-week countrywide tour of privatised companies. The tour sought to assess how the privatisation policy has benefitted both the private sector and the ordinary people. The MPs said privatisation has generally helped improve the financial standing of most of the formerly state-owned companies that were previously struggling. But friendlier laws and increased power supply would help make the businesses in question more profitable. They said that exonerating certain businesses like those in fisheries and energy production from observing the minimum 50m from protected areas such as water bodies and marshlands would help reduce on the cost of production. The legislators also called for a lower power unit price for the industry. “Looking at how much some factories are paying on electricity, some might end up shutting down soon,” MP Emmanuel Mudidi warned. He said there was need to subsidise energy for manufacturing firms that operate 24 hours. “Ideally, those who consume more should pay less per unit.” The MPs also urged government to expedite projects designed to increase energy production. The government has promised to increase electricity generation in the country from the current 110 megawatts (MW) to 563MW by 2017. Responding to the lawmakers, Amb. Valentine Rugwabiza, RDB’s Chief Executive Officer, explained that the government is aware of the energy challenges the country is faced with. She said the government’s plans for more energy production over the next three years will go a long way in addressing these challenges. “We know it’s a serious issue. Our energy is very expensive because we don’t have enough. But we have a lot of ongoing investments in the sector which will deliver very soon,” she said, adding that the energy sector remains a priority area for investment. Officials at the Ministry of Infrastructure said last month that Nyabarongo 1 hydro power plant, set to produce 28MW, could start generating electric power by June. Since 1997, the government has privatised 67 companies to private operators while another 30 or so have since been restructured or liquidated, the MPs were told. Naphtal Kazoora, head of Assets and Business Management Department at RDB, said two companies among the 67 that were privatised were not breaking even which prompted government to repossess them. “Most issues that the MPs raised were already documented and are being dealt with,” Kazoora later told The New Times. He however said that the MPs’ findings will help inform the next course of action. “Overall, I would say that the privatisation programme has been successful, by at least above 80 per cent.” The legislators on the committee also said government needs to continue following up closely on the performance of former state enterprises even after the initial five years after privatisation. “As a country we lose when some important companies fold. We need to find a way of monitoring these firms even after the probation period (of five years),” observed Annoncée Manirarora. The legislators also want the government to demand that investors maximise the entire value chain for products they deal in, citing cases where butcheries export horns in their raw form yet they could have processed them. “You need to look at the entire value chain when dealing with investors,” MP Nura Nikuze said. The RDB chief executive said: “As an implementing agency, this feedback will help us identify where we need to put more efforts. Government is keen to see privatised companies succeed in business.” The parliamentary committee is expected to conclude its tour of privatised firms this week after which it will present its findings to the Lower House plenary session for further recommendations and possible action.

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Privatisation: MPs want more energy, flexible laws