- The State of Cape Verde will once again become water and electricity utility Electra’s majority shareholder and will take over the administration of the embattled company. This is the not entirely unexpected but at the same time surprising result of the negotiations that took place Monday, July 24, between the government of Cape Verde and its strategic partners in Electra, the Portuguese consortium EDP/AdP, which holds 51% of the company’s shares. The negotiations were mediated by Portugal’s Minister of the Economy, António Pinho.
Portuguese Prime Minister José Sócrates fulfilled his promise: as he had indicated a little over a week ago on the island of Sal on his way to Bissau, Portugal’s Minister of the Economy, António Pinho, was in Praia Monday, July 24, at the head of a delegation made up of EDP and AdP officials to try and resolve the dispute that had placed the two Portuguese companies and the Cape Verdean state at odds because of Electra.
At the head of the Cape Verdean side in the negotiations was Minister of the Economy, Growth and Competitiveness João Pereira Silva, while EDP and AdP were represented by their respective administrative council presidents, António Mexia and Pedro Serra. Conversations began mid-morning Monday and wrapped up at the end of the day, based on a proposal that a Cape Verdean negotiator told A Semana Online was “impossible to turn down.” The proposal was presented by António Pinho at the beginning of the negotiations, which greatly facilitated dialogue.
In practice, EDP and AdP agreed to turn the controlling share in the Cape Verdean water and electricity company to Cape Verde’s government and municipalities, and even turned down any compensation they may have been awarded if the issue had made its way to the courts. The agreement does not mean, however, that the two companies will pull out of Electra entirely at this point, as was announced at one point. Rather, EDP and AdP will remain in the company as minority shareholders and technical partners. This position, according to an A Semana Online source, was considered important by the Portuguese government, which wished to preserve the image of a commitment to the development of Cape Verde.
According to the “accord in principle” signed by both sides, the EDP/AdP consortium and the State of Cape Verde “commit themselves to execute within 90 days at most a corporate restructuring operation with the replacement of the gross situation corresponding to the total social capital reported at the beginning of the concession, 600,000,000 escudos.” And, according to João Pereira Silva, the State of Cape Verde “will not spend one penny” in this operation. Pinho’s declarations were along the same lines, with the Portuguese Economy Minister affirming that this solution will allow Electra to “face the future with better perspectives.”
After explaining to journalists the implications of this accord, José Maria Neves claimed that Monday was a happy day for him as Prime Minister of Cape Verde. After all, with the help of Portuguese Prime Minister José Sócrates, he managed to get rid of an irritating pebble in his shoe, while at the same time getting to put on a brand new pair of nice, soft footwear.
However, as one of the Cape Verdean negotiators, who insisted on anonymity, told A Semana Online, the government’s accusations against the Portuguese partners for Electra’s dismal performance “are finished.” “Now the responsibility is entirely ours. There are measures, including unpopular ones, that will have to be taken.” One of these regards illegal hook-ups to the electricity network, which are responsible for losses on the order of 40% of the utility’s production in the city of Praia.
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