Lebanon Businessnews News

Electricity service providers
may terminate contracts
KVA demands international
third-party mediation
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Two out of the three distribution service providers (DSPs) are warning of a possible termination of their contracts with the national power company, Electricité du Liban (EDL).

KVA and NUE, the DSPs that cover maintenance, collection and projects in Beirut, Bekaa, and the South, have sent notices of termination that expire on June 24, 2015. BUS, the third distribution service provider (DSP) covering the North, will not end its contract.

The main reason behind the decision is the delay in reimbursement for their services and the lack of independent mediation to settle disputes between the DSP’s and EDL, according to a source at KVA.

EDL was supposed to send KVA $25 million in dues delayed for over a year. BUS has been owed $40 million by EDL, also delayed for the same period of time and NEU more than $40 million. The source at KVA said: “Not only did EDL delay payment until now but also did not pay them in full, based on its consultant’s opinion.” The EDL’s consultant is locally-based NEEDS, chaired by Mounir Yehia.

KVA is demanding the intervention of the Paris-based Chamber of Commerce and Industry to resolve the differences between the two parties. “If EDL does not hire an independent and unbiased third party, we will end the contract,” said the source.

The DSPs’ contractual term ends in August 2016. “We are only executing maintenance and collection operations. We have not started the projects we planned for our service area,” said the source at KVA. The DSPs are expected to install 1.1 million smart meters, between them. “This project alone requires more than two years of implementation. If our demand is answered, we might renew the contract for the term of the project,” he said. The project has yet to receive EDL’s approval, another delay that the DSPs are objecting to.

KVA has a staff of 700 full time employees, BUS 850, and NUE 1,200.

You published on Monday 8th June 2015 misleading information that where attributed to KVA General Manager Mr. Antoine Safi, we would like to declare the following: “Mr. Antoine Safi does not occupy the position of General Manager in KVA. Neither Mr. Antoine Safi nor any other person from KVA gave any of the information published in the above mentioned issue of your magazine to your magazine or to any other person. KVA Management also reserves all its legal rights towards the writer and publisher of the above mentioned.”

We apologize for the error in the title of Mr. Antoine Safi, who is actually a Project Director at KVA. We have modified our story accordingly.
Reported by Yassmine Alieh
Date Posted: Jun 05, 2015
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