Following an incident in parliament last week where the minister of energy, Ivan Collendavelloo, objected to the Labour Party’s Shakeel Mohamed tabling a letter from the Central Electricity Board to Alteo, Weekly speaks to Labour Party President Patrick Assirvaden to explain what the minister is being reproached with. He also comments on political and economic issues relevant to the current situation in the country.
Your colleague from the Labour Party, MP Shakeel Mohamed, put a question to Minister of Energy Ivan Collendavelloo in the National Assembly about an Alteo contract, which resulted in a lot of noise. What exactly are you reproaching the minister with?
What has happened in the Alteo/Central Electricity Board (CEB) case is one of the most defining scandals of the Alliance Lepep. The contract of Alteo, a 20-year Power Purchase Agreement (PPA), expired in December 2018. The CEB had a choice of negotiating an extension of the contract or launching a call for tender to see if the other sugar and energy producers could come up with a better quote.
So, they chose the first option. Where is the problem?
There isn’t one problem but several scandals. Even if we forget that in the Betamax verdict, the Supreme Court clearly set out that contracts of a certain amount cannot bypass the tender process, a verdict that the CEB completely ignored, there is the issue of granting a contract clearly not beneficial to the planters, let alone the country! The extended PPA negotiated with the government is a real scandal!
How is that different to what you were doing when you were head of the CEB?
When I was heading the CEB, we did exactly the opposite of what is being done now. You will recall that we had set up a negotiating panel, comprising technicians, economists and legal advisers from the British law firm Cameron McKenna, to negotiate a PPA in favour of the population and the CEB. What Collendavelloo has done is give Alteo even more favourable terms than the ones they had and which we tried to negotiate to have a fairer contract where the country does not lose everything and the independent power producers (IPPs) keep all the gains for themselves.
What is it in this contract that you so vehemently object to?
After all the negotiations we had with the IPPs at the time, as from February 2019, the CEB proposes a three-year contract extension to Alteo to produce not only energy from bagasse and coal, which already existed in the previous contract, but also trash energy from sugar cane leaves. So this is not just an extension of a contract but a signing of a new contract. Based on documents we have, Alteo demanded an extension of their initial PPA, but also a new contract for a new power plant of 2 x 35Mw. We need to ask what the trade-off is.
The trade-off is that Alteo will contribute Rs10 million to the small planters’ fund as recommended by the government.
Is that what you call a trade-off? Alteo will get a three-year extension to burn bagasse, coal and sugar cane leaves. We are talking about billions! And Collendavelloo claims he is unaware of the details of the PPA, that he isn’t aware of the letter that Shamshir Mukoon, the acting director general of the CEB, has sent to Alteo. The letter reads, “Further to a meeting held on Monday 18 February at the Ministry of Energy…” I’ve been chairman of the CEB for five years. Negotiations are held at the CEB with the negotiating panel. It is the board of the CEB, which also consists of a representative of the ministry, which approves PPAs. Here, Mukoon specifies that a meeting was held at the Ministry of Energy, under the aegis of the minister, Colledavelloo! It’s outrageous!
Mukoon didn’t specify whether the minister was present or not, did he?
He didn’t have to. The minister is accountable to the population, parliament, and the people who voted for him. It’s his ministry. The minister is politically and morally responsible for whatever happens at his ministry. Besides, what does the letter say? (reading out from the letter) “Mr. Mukoon wishes to confirm the following – to André Bonieux, of Alteo – the granting of a three-year extension with a minimum intake. Trash energy will be remunerated at Rs4.45 per kilowatt hour (kWh).”
What is your problem with this?
Rs4.45 per kWh is the price at which the CEB is buying energy from coal!
This is scandalous! Coal, which we import from South Africa, on which we pay a coal levy and transport costs, and whose price fluctuates with the rate of the dollar compared to the South African rand and the Mauritian rupee cannot be sold at the same price as sugar cane leaves! This is a very expensive gift being handed to Alteo! Cane leaves which you buy from small and major sugar planters for Re1 cannot be converted into energy sold to us for Rs4.45! What economic sense does that make?
The small planters will get Re1 for their bagasse, which is more than the nothing they are getting now. Isn’t that a win-win situation?
That rupee they will supposedly get is even more scandalous. It is far too little but what is even more scandalous is that in the PPA signed between Alteo and Mukoon, the Re1 will be paid directly to the planters, outside of the PPA. In the seven or eight PPAs signed so far, we’ve never had a condition outside the PPA for small planters.
What’s the problem with that, as long as the planters get their one rupee?
The problem is that if for any given reason in the future Alteo decides not to pay Re1, there is nothing in the contract signed by the CEB, after approval by Collendavelloo, to force them to do so. The Re1 paid to the planters is not binding on Alteo as it has been negotiated outside the PPA. The Rs4.45 per kWh for trash energy is however in the contract, same as the Rs4.45 per kWh of coal energy. Besides, Collendavelloo needs to give us the rationale behind energy from bagasse being sold at Rs2.80 per kWh while energy from sugar cane leaves, which are of the same value as bagasse, is sold at Rs4.45 per kWh.
There has always been criticism that IPPs have been making a fortune on the back of small planters and the population. Why didn’t you do anything about it yourself when you could?
Minister Mahen Seeruttun, a few days ago, in reply to a private notice question from the leader of the opposition [Xavier-Luc Duval – ed.], confirmed that and declared in parliament that unfortunately nothing can be done with regards to existing PPAs. The only way to make those contracts more balanced and have the PPPs pay the small planters a better price is through new PPAs. Now, we will have to pay Rs4.45 per kWh to André Bonieux of Alteo, a first in our history, knowing that the value of sugar cane leaves is equivalent to bagasse, i.e. zero value. Alteo, with the support, the approval or the encouragement of Collendavelloo, will sell their trash energy at Rs4.45 per kWh, the same price as for coal. I’ve never seen this anywhere in the world. Coal is meant to be more expensive as we import it, but thanks to Collendavelloo, Alteo will now use sugarcane that it pays peanuts for and sell the energy back to us at Rs4.45! It’s clear that at Re1, small planters are being marginalised, put at a disadvantage to Alteo’s benefit. This is outrageous. And the cherry on top is Seeruttun proclaiming that they’re doing their best to save small planters. They had a window of opportunity when this PPA ended on 21 December 2018 to sign a new contract with Alteo under terms which would protect the dying small planters and give them a chance to save their businesses. Instead, they have struck a contract which benefits an IPP. And it was an unsolicited bid from Alteo, while the judgement of the Supreme Court clearly highlighted that a contract of this extent ought to go through a tender process.
So you’re acknowledging that you did the same thing too with Betamax, aren’t you?
Absolutely. This is why the leader of the Labour Party, Navin Ramgoolam, recently asked if all contracts already entered into with IPPs will have to be challenged retrospectively. The IPP contracts were signed in the same format as the Betamax contract. And, after these contracts have expired, no call for tender, all the terms are to the benefit of Alteo and small planters are discriminated against!
You seem to confuse the Ministry of Energy and the CEB…
No! The contract was signed under the aegis of the ministry through an unsolicited bid. This is the first time I’ve heard of a contract being negotiated within the Ministry of Energy. It is disturbing! Collendavelloo needs to take full responsibility for this. When you see the correspondence between Alteo and the CEB, it is clear that pressure was exerted on the CEB. Collendavelloo owes an explanation to the population as to how he reached this price. The negotiations were conducted under duress, with the CEB having a knife to their throat. I wonder if Pravind Jugnauth is aware of this contract? Is the Lepep cabinet aware that Rs4.45 per kWh is the same price as coal? Are the Lepep ministers aware that small planters will only have Re1 on the Rs4.45 given to Alteo and that too only if Alteo wants to? Is the prime minister aware that another contract is about to be signed by Alteo for a new power station? There we’re talking about billions?
How many billions approximately?
Rs1.5 to Rs2 billion. These are funds which will go straight to Alteo. I’m not against Alteo per se, or any extension of contract. It’s the terms I am appalled by. You’re rolling out the red carpet for Alteo. The latter should, at the end of its previous contract, at least give a fair price to small planters and the population. Alteo does not have a monopoly in this market. There is Terra, Omnicane and Médine (though the latter has ceased its operations, it still has expertise) and small planters. Are you telling me that we cannot find any better offers? The idea of a tender process is precisely to have the best deal on the market.
If the other factory owners were actually interested, wouldn’t they have objected?
A tender process needs to be launched for them to know what the CEB is looking for. They can’t possibly know what the CEB wants if the latter signs contracts secretly and without a tender. At the end of Alteo’s contract, it was a direct negotiation between the CEB and Alteo, with the support – I wouldn’t want to use another word – of Collendavelloo. When Collendavelloo today says in parliament that he isn’t aware of this letter, this is serious. The director general of the CEB, the CEB, the ministry and the state commit to Alteo and the latter replies, saying we accept your offer Mr. Mukoon for Rs2.80 per kWh for bagasse and Rs4.45 per kWh for both coal and sugar cane leaves and we’ll pay a meagre Re1 to small planters outside the PPA and Collendavelloo is not aware of that! That means he has resigned from his responsibilities.
But shouldn’t the CEB, as an independent institution, make decisions on its own?
On the board of the CEB, there is a representative of the minister. Not even a representative of the ministry. I was at the CEB for five years, the CEB Act is clear. A representative of the minister sits on the board. I wonder if this letter was approved by the board of the CEB. The representative of the minister must have advised the board to give a letter of comfort with the intention of confirming Alteo’s contract. The minister said he is not aware. If the minister is not aware, he should sack the director general of the CEB right away. Because, as Shakeel Mohamed said in parliament, this was done behind the cabinet’s back. There should have been an open bid, especially after 20 years of waiting for this window.
How do you know the planters are not happy with Rs1 instead of nothing?
This is theft. The planters gain nothing at all. Just crumbs. They are reduced to being beggars. Re1 for sugarcane leaves that come from their fields, on the backs of which Alteo and the factories will make a fortune. It’s a jackpot for them, which is why we need to call Collendavelloo’s attention to this issue before the second contract is signed.
With Alteo too?
Yes! Another jackpot!
Is this all you have for your campaign against the government?
No. We have everything that the government has done in the last five years that has devalued all of our institutions. We have the metro, corruption, nepotism, drugs, insecurity, all the sectors which have become sick, the level that the country has reached when it comes to all the scourges, the Bank of Mauritius… The bag is full. This contract is yet another scandal. It’s theft. Daylight robbery!
But, we only hear you criticising when there are scandals. You are not offering any concrete and credible propositions about how to get the country out of trouble.
No, I don’t share your opinion. We have been making proposals in every press conference we have given. We certainly do not have only criticism. Ramgoolam has proposed and is still proposing 21 measures leading to a paradigm shift, une politique de rupture. You can go on our Facebook page and update your information. And, this government will have to face the music and defend their track record at the end of their tenure.
Do you mean the minimum salary, negative income tax, Metro Express, Safe City and Côte d’Or etc.?
We could spend all day unwrapping these measures. The Metro Express project is a nightmare for instance.
That was your proposal, wasn’t it?
Not in its current form, it wasn’t. One shouldn’t distort things. The metro project proposed by the Labour Party was very different from the nightmare people are being subjected to today. Where I live in Beau-Bassin, for example, there are constant traffic jams. This is a big strain on the inhabitants.
But this is temporary.
Be that as it may, development cannot be at the expense of the health of the population. And this project that the minister mentor had categorically rejected has been downgraded to a tramway and become the crown jewel of this government’s tenure.
It cost them less thanks to financial support from India.
That is impossible! If that is the case, why don’t they make the figures and conditions public? We all heard Pravind Jugnauth in 2014 prior to the election discussing the big commissions flowing in all directions regarding the metro project. Today, with the total lack of transparency, we are witnessing exactly that. The contracts are negotiated behind closed doors and it is a total mess. There is no holistic vision for any of this government’s projects. Côte d’Or, baptised Kot mort, is a nightmare. Look at the number of deaths! All these projects are being rushed to completion at the expense of so many things, including health and safety. It’s clear that with what has been going on for the past five years, the population knows it has been tricked and that there have been countless lies and false promises. Delo (water) 24/7, nepotism, corruption, all the ministers are implicated in one scandal or another with the latest obscene incident occurring within the parliament itself – and I’m not talking only about (Kalyan –ed) Tarolah. There is no respect anymore and they deem themselves entitled to slake their whims and fancies. As far as we are concerned, having learned from our past experiences and seen where we went wrong, we realise we need la politique de rupture (breaking away from the past). So we are proposing to abolish the vice-president position, we are proposing a new economic model, the IPPs will have to give a share of their returns to small planters to help them through their current situation… The changes we are proposing might not be popular with everyone but in the Labour Party, we have always been at the forefront of reform. We will start enacting these changes starting with a new team.
We haven’t seen any new faces in your press conferences so we are still wondering what you mean.
I can give you a list of people we are putting forward. Of course, we need to have some experienced members on the team; we are talking about heading a country here. We’ve all seen where the new faces of this government have led us – Rutnah, Teeluckdharry, Bhadain… Both competence and vision are required to lead a country.
You are still choosing to avoid discussing the topic of minimum wage.
Within the Labour Party we believe measures proposed must be implemented in a holistic way. The introduction of the minimum salary, for example, may have pleased people in the short term but has led to many small and medium enterprises (SMEs) closing down and many people losing their jobs in the longer term. There needed to be measures taken to counterbalance the economic impact the minimum wage and negative income tax would have on the employers, in particular the SMEs. But again, these measures were taken hastily and without proper holistic consideration, just to please people in the short term. I am not against these measures per se, but the way they were implemented. If the Labour Party had led their implementation, we would have supported employers with market research, marketing and putting the right structures in place to make these measures viable in the long term. As things stand, it may seem to benefit workers, but the country is suffering with increasing unemployment and employers going out of business. And watch the rate of the rupee. It is being devalued every day. So what does the minimum salary amount to? When we come to power, we will put the economy back on the rails so that the purchasing power of the population is maintained.
The population is scared of another surge of political witch-hunt if the Labour Party comes to power. How can you reassure them that we will not see a thirst for vengeance similar to the one we witnessed with this government?
Never in the history of the Labour Party have we witnessed such a thirst for revenge or a political vendetta. It’s not in the Labour Party’s DNA.
What about ‘leve paquet aller’?
A distinction needs to be drawn between the revenge and witch-hunt we have seen over the past five years and an incoming political party making sure they have a team of advisers around them who believe in them, endorse their philosophy and vision. The latter is common place in all countries as we’ve recently witnessed in France and the US, for example. But we have never used the police force and other national bodies to bully and get back at our political opponents the way this government has.
Are you saying that after everything the Labour Party has been put through, the humiliation of its leaders, the seizing of its funds, the trumped up charges against its members for the last five years, all will be forgotten and you will turn the other cheek?
People will be held accountable under the law, not in the barbaric ways the population has been subjected to for the last five years. We want people to respect the law and be held accountable. There will be investigations into how the BAI case and the Alteo case were handled, for example. And for more transparency on the Metro Express contract, Côte D’Or, Safe City and Agalega as the people have a right to know.
Which ‘law’ are we referring to here knowing that the police commissioner and the director of the Independent Commission Against Corruption (ICAC) are both nominated by the prime minister?
One shouldn’t be overly simplistic. These positions have always been filled by the sitting prime minister but in the past, there have been respectable nominees who commanded the respect of the people. But today, can you think of a single institution which is independent? The Labour Party’s DNA is different. Former Labour Central Bank Governor Manou Bheenick was subjected to pressure from the then minister of finance but was able to resist it thanks to the support of Navin Ramgoolam. You have also read two interviews by both Ramesh Basant Roi and Dan Maraye where they clearly stated that Ramgoolam never ever intervened in their work. Compare that with how the current prime minister has hijacked the bank. With this government, the respect of the pillars of democracy has really been at an all-time low.