Driving Lebanon’s Distribution Reformation
Writer: Matthew Staff
Project Manager: Josh Hyland
BUTEC Utility Services (BUS) is embracing the responsibility of driving a much needed infrastructural evolution in Lebanon, as its electricity distribution services continue to spread more prominently across the country.
Established in 2011 as a privately-owned Company tasked with carrying out utility services and environmental projects, the BUTEC-Group subsidiary’s defining moment took place in 2012 upon the attainment of a contract from Electricté du Liban (EDL) to provide its services across nearly a third of the entire country; subsequently catering for as many as 530,000 customers.
The meter reading, bill collection, customer services, asset management, network maintenance, construction and installation projects that have been undertaken ever since represent the first PPP experience in Lebanon and wider region – having been initiated by the Government themselves – and continue to address a pressing need for electricity reform in the nation.
“This sector was suffering from major flaws and the losses incurred on the Government represented a large portion of the Lebanese national deficit,” explains the Company’s General Manager (GM), Fady Aboujaoude. “The electricity distribution sector in particular was suffering from huge technical losses reaching more than 15 percent due to poor maintenance on the network, and a total lack of any network development projects in many years despite the growing demand on the network.
“In addition, commercial losses were reaching more than 25 percent due to increased illegal connections on the network and non-payment of electricity bills by the customers. Reducing these losses became a priority for the Government and a prerequisite for any investment in the electricity generation sector.”
BUS has not only addressed these wider societal and infrastructural shortfalls, but has introduced levels of expertise, modernity and innovation previously unseen in Lebanon, having unveiled new meters and new connections to ensure the successful delivery of its services from 2012 to the present date.
Via the widespread nature of BUTEC Group’s presence in the surrounding MENA region, BUS has also been able to expand accordingly, having already identified major potential projects across its technical and commercial prequalification processes.
Having seen the success of the Company’s achievements in Lebanon over the past four years, opportunities have been earmarked in Jordan, Iraq, Syria, Algeria and Ghana – as well as Egypt and Saudi Arabia further down the line – as growth avenues for the near future.
“The main successes of BUS have been achieved on the DSP (distribution service provider) project with Electricté du Liban where it has made a measureable improvement in the level of services provided to the customers and in reforming the distribution sector in Lebanon,” Aboujaoude says. “The main achievements on this project can be summarised firstly by the planning and design of 27 network development and expansion projects throughout the area; designed to eliminate the existing overloads which reached up to 50 percent in some areas, and the existing voltage drops on the network.
“The total value of these projects is US$64 million with a calculated payback period to EDL of nearly two years. 20 of these projects have already been completed or are nearing completion. A total of 300 kilometres of underground cables have been installed so far.”
Additional achievements include the completion of most of the backlog of customers’ applications for new meters or connections as well as 13,000 new applications; a breakthrough in customer services via the establishment of a computerised 24-seven call centre; the completion and successful testing of a pilot project for intelligent meters; an improvement in bill collection which now sees 97 percent of bills issued by EDL collected within one month; and also a reduction of commercial losses through the creation of a dedicated team to detect and eliminate illegal connections; with 17,000 cases being detected so far.
“We have also completed a full network survey for all electricity distribution assets in the area serviced by BUS and created an interactive online geographic information system which provides real-time information to our teams in the field,” Aboujaoude adds. “All these achievements were noticed by our customers who expressed their satisfaction with the services through a customer satisfaction survey carried out by an independent company.”
Well-trained and well-equipped
Outside of Lebanon, the most imminent international ventures include the launch of distribution services expected to begin in Basra, Iraq and the current formulation of a consortium to participate in tender prequalification for Ghana Electricity and another consortium to participate in a tender in Saudi Arabia. Both, alongside its extensive list of Lebanese achievements, emphasise how much the Company has evolved from its inception in such a short space of time.
Aboujaoude recalls: “Electricté de France (EDF), a renowned world leader in the electricity sector, was closely involved with BUS as a consultant throughout all the phases of its operation, in guiding the BUS employees and transmitting its experience to them. EDF also assisted BUS in carrying out network expansion studies and in setting up strict procedures to be followed for operating the network.
“BUS realised that in order to succeed with its operations on the ground, it was essential for its employees to share its vision and to be well-trained and well-equipped. This is why BUS established a training facility with more than 6,000 square metres of built-up areas.
“This centre ensures that the employees receive extensive training and get well accustomed to working closely with the network before actually working on a real network in order to avoid risks of electrocution. This facility also includes a fully equipped laboratory for testing intelligent meters, a call centre and the network operating control centre.”
Refining BUS’ internal infrastructure for the betterment of its external works has been an ongoing strategy for the Company and continues to materialise via a series of investments, modules and systems implemented to meet this continuous improvement requirement.
“BUS invested in several IT softwares during the course of the DSP project,” the GM offers as an example. “A comprehensive and integrated IT platform was recognised to be instrumental for the successful execution of the services on any utility project.”
A customer relationship management module, a case management module, a meter reading and bill collection module, and the aforementioned geographic information system are all examples of internal improvements implemented across BUS in recent times; all of which ensuring that the Company’s vast workforce has the best processes and technologies to work with when undertaking such high profile projects as those seen in Lebanon since 2012.
“BUS now has a team of nearly 850 employees including 50 engineers, 15 consultants from international firms, and 10 project management consultants,” Aboujaoude notes. “As part of the requirements of the DSP project, BUS hired, trained and fully integrated more than 600 daily workers who had been providing daily services to EDL for several years.
“Those workers resisted the DSP project and viewed it as a threat to their long-awaited objective to become permanent employees of EDL. Despite their fierce resistance, the Service Provider succeeded in integrating them within its organisational structure by providing them with full employee status including benefits, indemnities, annual leaves and insurances.”
Following extensive awareness campaigns, said workers have now become an integral part of the BUS team and make up nearly two-thirds of the Company; emphasising not only the lure that BUS has become as a business, but how integral its operations are proving to be across its operational areas.
“We believe that what differentiates BUTEC Utility Services is its vision and commitment to serve higher national causes throughout all its activities rather than just pursuing business objectives,” Aboujaoude continues. “On a national level, the main drive for venturing in the DSP project was BUTEC Utility Services’ ambition to make a difference in reforming the distribution network, reducing the cumulative debt on the Lebanese Government caused by the poor status of the electricity sector, and ultimately improving the quality of life for Lebanese citizens.
“On a regional-international level, BUS always strives to contribute to the improvement of the economy in the countries through its involvement in potential projects.
“We believe that such commitment to achieve higher aims and to serve the common good was crucial in achieving the current success of BUS and will definitely contribute in achieving BUS’ long-term objective to become a leading utility in the region.”