The provisional allocation, on October 23, of the water distribution contract in Dakar (Senegal) to Suez to the detriment of the French-Senegalese SDE (57.8% owned by the Eranove group, the rest by various local interests ) and Veolia is making waves.
As soon as the decision was notified, SDE, which has been managing the leasing contract since 1996, and Veolia, a major challenger, have filed two gracious appeals.
The two reserves tabled separately Friday (October 26th) with the Minister of Hydraulics and Sanitation, Mansour Faye, were rejected Wednesday, October 31 by mail bearing the signature of the said minister. A source of the SDE contacted by Financial Afrik, said take note of this decision which now opens the way to a litigation before the Authority of regulation of the public markets (ARMP), preliminary before a possible arbitration.
As a reminder, Senegal launched a call for tenders in 2016 as part of the reform of the water sector. The process was followed end-to-end by the donors involved in financing the future seawater desalination plant and the KMS3 project.
The choice of the buyer was made in three phases: a prequalification which retained the three current protagonists, followed by the delivery of technical offers on January 5, 2018. The three candidates were declared technically qualified and compliant with the specifications. Only remained the third step, that of the presentation of financial offers. These were submitted on June 1, 2018 by the three candidates. According to the procedure, the lowest bidder would be selected.
However, this is where things get complicated because the Minister of Hydraulics and Sanitation, Mansour Faye, will publish the details of the financial offers on June 10, 2018 through the airwaves of RFM radio. According to the minister, the SDE proposed the lowest operating price (286.9 FCFA per cubic meter of water) followed by Suez (298.5 FCFA / m3) and Veolia (366.3 FCFA / m3). In the end, Suez was chosen. The price difference, according to unconfirmed estimates from official sources, is expected to cost CFAF 50 billion over the 15-year lease period.
The minister who said that “the price of water should ultimately drop at the end of the call for tenders” (The Observer May 14, 2018) would he returned to this major goal? The speculation is going well. The choice of Suez would also pose a conflict of interest since the French multinational and its local partner, the CDE (Business Consortium), obtained the contract for the construction of the Keur Momar Sarr 3 (KMS3) treatment plant. a capacity of 200,000 m3 / d by 2035.
In other words, the same operator who builds infrastructure, will be in charge of the distribution of water. The potential risk of a conflict of interest, or even a de facto monopoly, is not to be ruled out. In the meantime, the 1,200 employees of the SDE are following this file and would require 15% of the capital of the distribution company.
