Cablegate: Worsening Power Cuts Leads to Rioting in Dakar

VZCZCXRO8073
RR RUEHMA RUEHPA
DE RUEHDK #1133/01 2461649
ZNR UUUUU ZZH
R 031649Z SEP 09
FM AMEMBASSY DAKAR
TO RUEHC/SECSTATE WASHDC 3021
INFO RUEHZK/ECOWAS COLLECTIVE
RUEHLMC/MCC WASHDC

UNCLAS SECTION 01 OF 02 DAKAR 001133

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TAGS: PGOV PREL PINS PINR KDEM ECON ENRG SG
SUBJECT: Worsening Power Cuts Leads to Rioting in Dakar

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1. (SBU) Dakar and most of Senegal's major cities have been gripped
by chronic electricity cuts. At the heart of the issue is SENELEC's
(the state electricity parastatal) inability to find adequate
financing to buy fuel to run their power stations. Energy Minister
Samuel Sarr has handed in his resignation to President Abdoulaye
Wade against the backdrop of two days of serious rioting in Dakar's
crowded suburbs that are already suffering from severe flood damage.
However, sources within the Energy Ministry say that Senelec has
managed to secure CFA 26 billion (USD 56.5 million) in short-term
financing that will allow the company to buy the fuel it needs. The
same sources told Emboffs that Senelec is down to 8,900 Metric Tons
of fuel. End Summary.

2. (SBU) Electricity cuts have reached chronic proportions as long
and unscheduled outages of 12 to 15 hours and more are becoming
common in most areas of Dakar. Secondary cities are experiencing
similar outages. Businesses and households are complaining ever
more loudly as the cuts continue unabated. Small businesses such as
tailor shops and carpentries are especially affected and unions
representing their interests report a 40 percent drop in production.
Generators and candles have become two of the most sought after
commodities around, and businesses that used to be able to endure
short cuts must now either invest in their own power sources or
close.

3. (SBU) Senelec consumes 1500 Mt of heavy fuel per day for a total
monthly cost of USD 36 million. Its equipment is obsolete, some
dating from the early sixties, inefficient, and costly to run.
Service is perennially poor and transmission and distribution
facilities are in deplorable condition due to wear and tear. To
make matters worse, one of gas turbines of the 50+ Mw Cap De Biche
power plant is currently sitting idle in the workshop of
Connecticut-based Greenwich Turbine Inc. (GTI), which originally
built the plant in 1995. The turbine has been there for over year
because Senelec has been unable to make a third and final payment
for the repairs.

SENELEC'S FINANCES IN DIRE STRAIGHTS
----------------------------------

4. (SBU) In a meeting with Cheikhou Cisse, Senelec's Director of
Communication, he argued that that the company is facing major
financial difficulties because of non-payment of outstanding arrears
by delinquent customers. Cisse underlined that Senelec is owed as
much CFA 39 billion (Approx. USD 78 million). This debt includes
CFA 17 billion (USD 34 million) from three private companies, CFA 14
billion (USD 28 million) from local municipalities (cities), and CFA
7 billion from clients who have had their power cut, "We can't
obtain a loan from commercial banks, and our suppliers are reluctant
to give fuel at credit," said Cisse. Besides collecting its debts
from its clients, Senelec's action plan calls for combating fraud.
Cisse noted that the company is losing close to CFA 20 billion (USD
40 million) a year as a result of people illegally siphoning off
power from the grid.

REACTIONS
---------

5. (SBU) After simmering for months, the people of Dakar finally hit
the streets on September 1 just after breaking their fast. Hundreds
of youths from the Dakar suburbs Niary Tally and HLM demonstrated
against the cuts by invading the main boulevard in Niarry Tally and
HLM shouting, "electric cuts must stop, no more cuts, enough is
enough." The demonstrations were characterized by people burning
tires, blocking roads, and attacking city buses. The police, who
arrived on the scene long after the riots started, tried to disperse
the group with tear gas. The riots continued for a second night on
September 2, but this time they were more widespread to include the
suburbs of Pikine. Once again the police responded with tear gas
and batons. President Wade is expected to return from his vacation
soon and several sources said that he will make an important
announcement on the day of Korite (the end of Ramadan) around
September 19-20. Meanwhile, consumer associations have remained
mum on the subject since the majority of their leaders have recently
received plum appointments as members of the Economic and Social
Council.

Comment
-------

6. (SBU) President Wade has yet to accept Minister Sarr's
resignation and even he did it would not change the fact that there
is just not enough electricity production or capacity in the country
to meet demand. Some of this has to do with the way that Senelec is
being mismanaged but the simple fact is that building new power
stations takes time and a lot of money, both of which Senegal does
not have. Due to poor planning Senelec will be forced to buy fuel
off the spot market, thus paying regular rates further straining an

DAKAR 00001133 002.2 OF 002

already burdened budget. End Comment.

Bernicat

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