PHOTO: The Author
By Hun-Bu Tulay
A Public Corporation (State-owned Enterprise) is owned and operated by the Government. The Public Corporations are established for the administration of certain public programs or provision of essential services such as water and sanitation, telecommunications, energy, transportation, etc. at a low cost to the inhabitants of the country.
These enterprises enjoy internal operational autonomy; they are free from government control. They are to run in a business-like manner. If managed properly, they become an important source of revenue for the Government by paying various taxes, such as custom duties, value added tax, excise duty, income tax and others. Such taxes are important sources of revenue for the Government. Profit generated from the Public Corporations can be used to fund Government’s development programs if the funds are managed well.
In Liberia, during the period 1948 to the early 1960s, public services such as water and sanitation, electricity, telecommunications, and radio broadcasting were provided by the Department of Public Works and Utilities under the watchful eyes of the Secretary of Public Works and Utilities. Around 1965, President Tubman separated Utilities from Public Works. Service providers became the Public Utilities Authority responsible for services such as water and sewage collection and disposal, telecommunications, electricity, Radio Broadcasting, etc. The Public Utility Authority was headed by a chairman.
When President William Richard Tolbert, Jr. ascended to the Presidency, he reviewed the performance of the Public Utilities Authority (PUA) and realized that services rendered were poor and the PUA was not growing. He wanted more accountability; PUA was not accountable and transparent as he had wanted it. It was too large to be managed by one central authority. So, in 1973, he approved an Act amending the PUA Act and establishing four Public Corporations (the Liberia Electricity Corporation (LEC), the Liberia Water and Sewer Corporation (LWSC), the Liberia Telecommunications Corporation (LTC), and the Liberia Broadcasting Corporation (LBC)), each with its Board of Directors and Managing Director. President Tolbert had two objectives in doing this. One was to reduce government subsidies to these Corporations, and two, for these Corporations to be self-sustaining as well as income generating to fund government’s development programs. Between 1973-1980, these corporations improved services and the costs of these services were very low and became affordable by 80% of the population. Services were regular and sustainable 24 hours each day.
It is now forty-two years since the Military Coup d’état. Tolbert’s dream of a wholesome functioning Society, where there would be reliable, efficient, and sound public services provided by Public Corporation remains a utopia. Public Services have become so irregular to the extent that it is difficult to determine when a community will get electricity or water supply. Hospitals, hotels, schools, community halls provide their own services (electricity and water). Public facilities are poorly operated and maintained. Government institutions and ministries have become liabilities to the Corporations (they do not settle their bills). For example, the government institutions and officials owed the West African Power Company over US$9,000,000.00 just in three counties (Nimba, Grand Gedeh and Maryland). This has caused a major constraint for these Corporations to the extent that they are unable to meet their obligations to their employees and businesses that supply them goods and services.
No major development of a transformational nature can take place in any country if services such as electricity, water, and sanitation are poor or lacking. In any society where these services are poor or lacking, the population suffers because of high prevalence of diseases, particularly water borne and water related diseases, as well as students’ reduced performances because the lack of electricity hampers their studies. Moreover, girls and women spend hours fetching water for the family daily. Infant mortality, and even the death rate for the general population increases in such society. Cost of treatment at hospitals increases because these facilities must provide electricity and water at high costs; and these costs are passed on to the patients. If the government really wants to improve public services because it needs development transformation, she must find innovative means of improving the provision of public services to the people.
There are rumors that the Government wants to privatize some public corporations, particularly the Liberia Electricity Corporation (LEC) and the Liberia Water and Sewer Corporation (LWSC). Privatization of Public Corporations has been attempted in many countries and the results were disastrous (high tariff for services and poor services). Ask the Ghanaian Government and ordinary Ghanaians about the services of the Ghana Water Company, Ltd. (GWCL) after it was privatized in 2006. The government did not renew the contract when it ended in 2011 because the private sector failed to meet the contractual commitments. Presently the Ghana Water Company is operated by the State and services are much better. Even in Liberia, if we were to compare the performance of the LEC before and after the coming into effect of the current management contract, most Liberians will say the services were better before. Most of the well performing water and Energy companies in Africa are operated by the State. But to be able to perform effectively and efficiently, the Government must have the political will to ensure autonomy. One example of this was done in Cote d’lvore. The Government’s water supply was called SAUR (Societe d’ amanagement Urban et rural). When this institution was performing poorly, the President was informed that Government officials were in high arrears.
The late President of Cote d’lvore, Felix Houphouet-Boigny took a political decision in September 1960, when he said that all Ministers who were in arrears to SAUR pay their bills in four hours or risk being dismissed. He also changed the name from SAUR to SODECI (Societe de distribution d’eau de la Cote d’lvore). Since 1960, no Government official has owed the company. This is what we call a strong ‘Political Will’. Today SODECI is one of the best performing water companies in Africa, second only to that of Uganda. In Uganda, the members of the Board and the Management Team have a five-year contract renewable every five years. The contract is a performance-based contract with specific targets being achieved during the period.
During the period 2006 – 2011, the President of Liberia and the Cabinet were informed about the high arrears owed by Government officials and institutions at one of the Cabinet meetings. At that Cabinet meeting, the President made a political decision. She informed the Cabinet that their offices and homes would be disconnected if they failed to settle their bills. During that period, the Executive Mansion, and the Ministry of Foreign Affairs regularly settled their monthly bills, particularly to the LWSC. This is what we call the political commitment of the Government. During this period, LWSC did not receive subsidies for operational cost (fuel, chemicals, maintenance, spare parts, etc.) from the government, and supply was sustainable for 18 hours daily. The donors, particularly the World Bank and African Development Bank did not subsidize the corporation operations but did capital investment. During that same period, the management developed monthly performance targets for each department and incentives were given to Departments that achieved their targets. In six months, water production increased from 0.70 million gallons per day to 4.5 million gallons per day. Revenue collection climbed from LD100,000.00 (US$14,300) monthly to US$150,000.00. By 2017, the monthly revenue increased to US$350,000.00 monthly. All this was achieved at the treatment level of the plant of 25% capacity (4.5 million gallons per day) or before the completion of the rehabilitation. What do you think the corporation should be generating at 100% treatment capacity (16 million gallons per day)?
It was projected that upon the completion of the rehabilitation, revenue of the Corporation would be US$500,000.00 monthly and there would be an annual increase of customers of 20% for the next five years, corresponding to an increment in revenue of 10% annually.
The White Plains Water Treatment Plant was fully rehabilitated to pre-war capacity and commissioned in November 2017. In addition, the Plant was connected to the LEC Grid. Also, three generators (two 1,500 Kva and one 1,000Kva) were purchased as a source of energy supply to make the plant self-sustaining in energy supply. Hence, there was no reason for the LWSC not sustaining 24 or at least 12 hour-supply daily schedules. This can be done today if there is the political will.
The Government must also commit itself to abide by the Laws that created these Public Corporations. The Acts that created these Public Corporations clearly state how Managing Directors and Board Members are to be selected. For example, when the act of the LWSC was amended in 2017, appointment of the Managing Director section (88.7 and Deputy Managing Directors section 88.8) read as follows: 88.7 Appointment of Managing Director: The Managing Director shall be appointed by the President with the consent of the Liberian Senate, based on the recommendation of the Board of Directors. And 88.8 reads: All Deputy Managing Directors shall be appointed by the President with the consent of the Senate, upon the recommendations of the Board of Directors.
88.5 Board of Directors
- Section 88.5.2 reads: The Chairman and all Board Members shall be appointed by the President of Liberia with the consent of the Liberian Senate.
Section 88.5.3 reads: All private sector Members of the Board shall be appointed on such terms and conditions as may be specified in the instrument of his or her appointment which shall, in the first instance, be for four years.
Did the President appoint the Managing Director, Deputy Managing Directors and Board Members as mentioned in the amended Act?
Now coming to the LEC: Should the LEC be rationing power?
The Mount Coffee Hydro Plant has a capacity of 88 megawatts and the Bushrod Diesel Plant has a capacity 48 Megawatts, while the energy demand of Monrovia is only 50 megawatts. Just the Bushrod Plant alone can meet 96% of the demand of the city. As far back as 1968, the low level of water at the Mount Coffee hydro dam was an issue, but the Bushrod Plant supplied the energy demand of the City. Even, when the hydro was under rehabilitation, it was only Bushrod that provided energy to the city, but power was not rationed as it is today. Is it because the LEC does not have funds to purchase fuel? We understand even salaries at the Corporation are delayed just as it is with her sister Corporation, the LWSC.
Why are the members of the legislature not asking the hard questions? The legislators have three cardinal responsibilities (Representation, Law making, and Oversight). If this country must be transformed, the legislators must take the Oversight responsibility seriously. Why are the legislators not asking the serious questions? What does it mean to have oversight responsibility? In our opinion, the legislators are a great embarrassment to the country. If they take their responsibilities seriously, the country will have a focused direction. How can the legislators in Margibi, Grand Gedeh, Grand Bassa or even in Monsterrado Districts #4 and #15 not ask why the water supply has stopped? In Districts #4 and #15 why are the water systems developed and completed early 2018 not supplying the inhabitants with water, and why are the public latrines constructed not open to the public? Why did the partners, particularly the African Development Bank, invest in the construction of these facilities?
When the constitution empowered the Senate to confirm Government officials, it is a fact and the Law that if the Senate rejects nominees, they do not serve in the positions for which they were nominated. The legislators also have the power to pass a vote of no-confidence in any official that is not performing. This is a power that was exercised under Madam Sirleaf, when a vote of no-confidence was passed on Madam Broh, when she was at Monrovia City Corporation. Madam Sirleaf removed her because of that vote from Monrovia City Corporation.
The poor performance of our students in external exams and that of the LEC, the LWSC and the security situation we think require a VOTE OF NO-CONFIDENCE in the people heading some of these institutions.
We do not need to privatize our Public Corporations. All we need is to appoint competent men and women on the Board of Directors and a knowledgeable and technical Management Team with administrative ingenuity and tactfulness. There are many qualify Liberians both in Liberia and in the diaspora; some are CDCians and some are not, but for the sake of Liberia and Liberians, the government needs to reach out to the non-CDCians with the qualifications as well as of technical know-how and administrative capabilities to help. We need to save lives, and this would be possible only if we reach out to Liberians who can help.
Monrovia is currently the largest village in Africa because of the lack of pipe-borne water and regular electricity supply, and poor security, and sanitation. We are telling our partners that the country has no qualified men and women to manage our corporations and security institutions. Why are Ugandans and Ghanaians ably managing their facilities and Liberians cannot? It is because we do not appoint the right people in the right positions. Politics and party loyalty are now the yardstick for appointment even if the would-be appointee is a novice or a complete buffoon.
The Laws give the Senate that power to ensure that competent Liberians are appointed to technical and other positions to professionally manage their respective institutions. If the members of the house of senate fail to act now, the blood of many of our citizens, who are dying every day, will be on their hands.