NewsWest AfricaGabon: Water war

Mon,24Sep2018

Posted on Thursday, 07 June 2018 15:20

Gabon: Water war

By Honoré Banda
afp

Libreville nationalised Veolia’s stake in a water and electricity company in February, and the French company is seeking mediation and possible arbitration

The government of Gabon and the French utility Veolia are at daggers drawn over the future of Libreville-based water and electricity company Société d’Energie et d’Eau du Gabon (SEEG). On 16 February, the Gabonese authorities physically took over the headquarters of the company that was 51% owned by the French firm and cancelled its concession in a dispute about service quality. On 8 March, Veolia launched a complaint at the World Bank’s International Centre for Settlement of Investment Disputes (ICSID) after a month of unsuccessful attempts to make peace. 

 
At the centre of the dispute is President Ali Bongo Ondimba’s government’s claims that Veolia has provided poor services and has not spent what it was supposed to on infrastructure investment and upkeep. The populations of major Gabonese cities including Libreville, Port-Gentil and Franceville have regularly complained about water cuts over several years. Relations between the government and Veolia, however, seemed to improve last year when the two reached an agreement about paying their respective debts to each other. 
 
In its public statements, Veolia has said that the nationalisation of its stake in the SEEG was illegal and that it had done even more than it had promised. It says it invested $558m in Gabon, more than its concession contract called for. Veolia also says that its contract shows it is the government’s responsibility to pay for new installations. The ICSID will seek a compromise between the two parties, and Veolia says it is willing to go to arbitration if Libreville refuses to relent. 
 
Veolia has controlled the SEEG since 1997, and the government renewed the French company’s contract for another five years in March 2017. Since the February conflict, both sides have turned to the media to argue their cases . The Gabonese government maintains that, in addition to skimping on investment, Veolia was responsible for pollution at several sites that the SEEG managed. Gabon’s water and energy minister Patrick Eyogo Edzang told Jeune Afrique: “We have damning proof, especially photos of a lake polluted with oil.” Communication minister Alain-Claude Bilie-By-Nze added that there was environmental damage at almost all of the SEEG’s sites. Veolia officials denied the government’s allegations. They said that the government never brought up environmental problems in more than a dozen audits of its operations over the past 10 years. 
 
Relations soured
 
Gabon is an important Africa market for Veolia. In Africa, the French group is also active in Egypt, Morocco and Niger. In February, it reported a 3.5% rise in its 2017 global turnover to €25.1bn ($30.9bn). Veolia regularly has turnover of about €1bn from its African operations. 
 
Gabon and France have maintained close economic ties over the years. Pierre Gattaz, the president of French business lobby Medef, wrote to Gabon’s prime minister in March to complain about what he sees as the poor state of relations between the Libreville government and French companies. French food services company Sodexo and oil services company Bouygues Energies & Services pulled out of Gabon during the country’s economic downturn in 2017, leaving a string of legal cases from former employees behind them. 
 
Meanwhile, Russia’s ambassador to Gabon, Dmitry Kourakov, added an additional geopolitical twist to the SEEG saga in March. He said that Russia’s RusHydro would soon set up shop in Gabon in the water and electricity market. Energy minister Edzang denied there had been any such talks with RusHydro, saying that the government was going to take its time to study the SEEG’s operations before looking for a new partner in the project in perhaps a year. 
 
This article first appeared in the May 2018 print edition of The Africa Report magazine


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