New Vision Haiti: Dichotomy and Sectorial Privatization of EDH

The Electric Power Crisis

EDH is Haiti's monopolistic and state-owned electric power company. EDH's electric power grid is in a lamentable state; it is in serious need of repair. The SAP (Structural Adjustment Plan) of 1994 estimated at $46 millions US the funds necessary to upgrade EDH's power distribution grid. It is generally not believed that the state of Haiti possesses that kind of cash to spend on improving EDH in the immediate or the foreseeable future.

Haiti's biggest hydroelectric power dam, the Peligre dam, is usually less than 55% operational: 30 Megawatts produced out of 54 Megawatts of installed capacity. Although the capital city, Port-au-Prince, has a peak demand of at least 200 Mwatts, the total installed capacity of EDH is only approximately 230 Megawatts.

From a financial perspective, EDH charged the highest rates in the Caribbean in a country where 60% to 80% of the population lives in poverty. The IMF estimates revealed that, in 1994, EDH spent over $ 1.5 millions US while taking in only $ 925,000 US. Today, few can speculate that EDH financial situation has improved; in fact it has gotten worst. Water scarcity caused by extended dry seasons and constant deforestation exacerbates an already dire situation. Not to mention EDH's inability to meet its financial obligations toward its creditors - about $ 22 millions US dollars in debt and growing.

From a technical perspective, the discrepancy between demand and output further contributed to the deterioration of the power grid and associated equipments thru unforeseen system overloads. The lack of expertise both from EDH personnel as well as contractors can be easily documented by unfortunate incidents such as a transformer blowing up while a failed one was being fixed. The EDH personnel are fairly young and have little cumulated experience, an indication of high rate of employee turnover.

Although power companies are one of the most profitable and attractive ventures around the world, EDH generated little serious interests from prospective buyers - being one of the state owned enterprises slated to be privatized by the 1994 SAP. It is believed that two main obstacles deter private investors: popularly supported opposition to privatization from EDH's lower echelon employees and the extremely low purchasing power of the general population.

I say it isn't either one. The obstacle to private investors is article 14 of the Law on the Modernization of Public Enterprises (MEP).

It is troubling to note that a couple of private electric power companies have surfaced in Haiti in the past couple of years. Government officials publicly announced that the State of Haiti has entered into contractual agreements with one or more of those private electric power companies for the supply of an additional 30 megawatts to the EDH's grid. At this time, I am not aware of any laws in Haiti that either regulate the operations of private power companies or even recognize their right to exist on Haitian soil. This makes for an interesting topic of discussions.

Needless to say a solution to this crisis must be revolutionary if it is to succeed not just financially sound.

Click here to download my Analysis and Proposal in PDF format (requires Adobe Acrobat Reader)

Dichotomy and Sectorial Privatization of EDH:
An Empirical Proposal to Resolve the Electric Power Crisis in Haiti

To all the critics, I just want to help my homeland the best way I know how; its cause is without mercy. I wish to lead it out of the darkness into the light, literally.

One day I was asked by a foreign individual to describe Haiti and my response was as follow: "Haiti is a black woman sitting on a stool in a pitch-black dark room; she holds a single strike-anywhere-match in her left hand, a candle in the other hand, and a veil covers her face. She is patiently waiting for a man who is able to see in the dark to come into the room, find the match she is holding, light her candle, and remove her veil. Then, and only then, it will be revealed how beautiful she is."

It saddens me to say that a soundless dialogue between contemporary compatriots has silenced the voices of the Haitian people for several decades now. A people unable to have its opinions be heard is incapable of reaching any historical compromise which is essential if it is to aspire to progress. In that regard, I am inviting my fellow Haitian compatriots of all walks-of-life to follow my lead and jumpstart an unprecedented, organized and formal exchange of opinions on all the issues that we hold close to our hearts.

It is no longer sufficient to say 'I have an idea'; it is however imperative to develop that idea thoroughly into a vision, a complete plan for the betterment of Haiti's future. Let us break the silence that has held us captive for too long.

The following pages outline a simple but very effective plan to resolve Haiti's electric power crisis. I have little expectation that the state of Haiti will adopt this plan; I am hopeful nonetheless.

It is worth noting that it is almost meaningless for anyone to stipulate that "all EDH needs is better management' - public or private. It is therefore meaningful to ask ourselves one simple question: what is the most beneficial approach to address Haiti's electric power crisis?

The answer is: an approach that keeps EDH workers employed while at the same time turns EDH into a profitable and well managed organization; an approach that creates jobs in Haiti; however few the number of jobs created may turn out to be, they will come as a drop of rain to Haiti's desert of widespread unemployment; an approach that provides electric power 24/7 wherever EDH is already present; and finally an approach that embraces the belief that the private sector is You and I.

I sincerely believe that any other model will lead to skepticism, bitterness and confrontation among a people that have already suffered so much for so long.

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