Gabon Seizure: Veolia Counts the Cost

French group Veolia has reported no progress in recovering its West African utility asset.

In first half results August 1, Veolia stated that the Gabonese Republic on February 16 had unilaterally terminated the concession agreement signed with Société d’énergie et d’eau du Gabon (SEEG), which is 51%-owned by Veolia, alleging several different reasons including the public interest. Veolia said that same day all SEEG's material and human resources were seized by the ministerial order, with an executive body appointed to implement the seizure. "Since March 31, 2018, the cessation of activities in Gabon has led the group to classify SEEG in 'net income from discontinued operations'," Veolia added August 1.

Seeg supplies power and water to most of Gabon's population and is a significant generator of gas-fired electricity in the country.  The French group disclosed in March that it had filed a request for arbitration at the World Bank's ICSID tribunal in Washington DC but said it was willing to negotiate; its August 1 published statement provided no update on the dispute.

Veolia though revealed that, of its €46.6mn ($55mn) net loss from discontinued operations in 1H2018, most - namely a loss of €44.5mn - was due to the reclassification of SEEG.

Veolia's overall worldwide net published income in 1H2018 was €225mn, up 13.5%.