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About Us >> Profile

Company Profile

Majan Electricity Company is one of the leading companies in electricity distribution and supply which was formed as a closed joint stock company under Royal Decree 78 / 2004. The company’s core business is to manage electricity network through the distribution and supply of electricity to customers in an authorized area of 50,250 km2 in Al-Batinah & Al-Dahirah regions and Buraimi governance under a license issued by the Authority for Electricity Regulation, Oman.
The authorized capital of the company is fixed at RO. 500,000 divided into 500,000 shares, resulting in "One" Rial Omani value for each share.

The company commenced its operations on 1st of May 2005 following the implementation of the "Transfer Scheme" issued pursuant to Royal Decree 78/2004.
 
130,998
Customers
3,004,866 
MWh sold
728.1
MW Maximum Demand
182
33/11 KV Substations
6548
11/0.433 KV substations
 

Vision

To be one of the leading distribution and supply companies in the region by 2016.

Mission

Deliver safe, reliable and economical electricity to the customer and maximize the stockholder value.

Values

  • Health, Safety & Environment – creating an HSE environment for our staff, contractors and the public. Ensure we comply with safe working codes of practice to ensure we improve our ability to mitigate risks associated with our Network.
  • Recognizing Our Staff – providing our people with the tools and training to improve their capabilities. Management must demonstrate leadership by teaching its employees on a continuous basis. Recognizing and rewarding employees for work performed.
  • Customer Satisfaction - (including the implementation of a high level of standards) is foremost to meet our obligations to our stockholders.
  • Maximizing our returns on Assets by constant product and service development and innovation, economic purchase and quality.
 
Chairman message

About us >> Chairman's Message


Dear Shareholders,
On behalf of the Board of Directors, I am delighted to present the fifth Annual Report and audited financial statement of Majan Electricity Company S.A.O.C (MJEC) as at 31 st December 2009.

Financial Performance
In its fifth financial year as of 31st December 2009 (12 months), the company achieved total revenue of RO. 77.633 million (RO. 62.541 million '08) out of which sale from electricity was RO. 43.202 million (RO. 38.018 million '08) and subsidy was RO. 31.199 million compared to RO. 18.140  million in 2008 . The increase in the subsidy is in line with the increase in the capital expenditure (R.O.17.967 million '09) compared to R.O 12.500 in 2008. In addition, due to the market recession, Industrial Customers have consumed 445,282 MWh compared to an expected 669,453 MWh . This reduced the Industrial revenue by R.O. 3.534 million (33% below the target).direct costs stood at R.O. 62.265 million (R.O. 51.146 million '08).As the company has a Distribution and supply License , the majority of the direct costs were due to bulk Supply and transmission use of the system charges at 68% and 14% respectively.
Gross profit achieved for the same period was RO. 15.3681 million compared to RO. 11.359 million in 2008, being an increase of 34.8%.. The company ended the financial year with a net profit of RO. 6.359 million (3.184 million'08). The company achieved a return on the assets of 6.84% which was the highest return since MJCE inception .Basic earning per share achieved was R.O. 12.7 (R.O 6.4 in '08) , and a net asset per share was R.O.157/ -(R.O.149/-'08).

Business Performance
In order to support customer growth and improve existing services, Majan carried out major capital additions to its infrastructure. This benefited our domestic and business customers and provided corresponding opportunities for shareholders to earn additional returns on a growing asset base.
During 2009, the company completed 90.5% of the carried forward projects. The total investment in 2009 reached R.O. 23.527 million in load and non load related projects of 33,11 Kv and LT in addition to establishing  new stations to meet the increase in demand in the authorized areas. In 2009, 72 projects were commissioned totaling R.O.11.729 million R.O 5.663 million will be carried forward to 2010.
During 2009, the company reduced the network losses to reach an outstanding record of 15.8% which is 0.35 behind the target.
The company put an immense effort into the health, safety and environment for the Majan staff and extended this interest to include contractors and the community. In 2009 there were two traffic accidents involving employees of Majan which led to both financial losses and minor injuries, plus two electrical shock accidents of two customers which resulted in one death and an injury. In each instance Majan did not delay in providing awareness –raising programs and enact laws that will in the future protect us, our customers and contractors from future potential danger whilst working on our work or network.

 Regulated Activities
Proactive involvement in Regulatory arenas is one of our highest priorities. The utility business is fundamentally dependent on this economic regulation.
The company achieved 89% compliance with the license requirements and is aiming to be 100% complied in 2010.thee company achieved actual regulated revenue of R.O. 76.069/-  million compared to  a maximum allowed revenue of R.O. 76,624,459.Utilization of capital expenditure allowance s from Authority of electricity Regulation was 94% and Operating Expenses allowance of 29% above the allowed.


 Human Resources
In order to achieve outs tending electricity services in terms of safety ,reliability ,quality we initiated the restructuring of the organization structure in the first quarter of 2009.In order to do this we benchmarked the structure with other international utility companies to ensure continuity and optimal performance.Majan Electricity Company will be the first in the sector to introduce an Asset Management Division which will be charged with maintaining the assets and ensuring that its useful life is utilized. The structure was completed in the second quarter of 2009.All MJCE employees have job descriptions which identify their responsibilities linked to the license conditions and KPls will improve the level of services and achieve MJCE objectives.   
We believe that the focal point of any successful organization is to retain and attract the valuable staff in different areas of the Company by creating a healthy and motivated environment that satisfies their needs and improves their skills to reach the highest standards. In 2009
• A total of 162courses (90 courses '08) have been conducted during the year of 2009
• A total of RO. 228,000/- was spent on training against RO. 186,006/- in 2008.
• An average of R.O. 962/- spent to every staff against R.O 802/- in 2008.
• Total expenditure on higher education was RO. 32,158/-
• We provide free training development opportunities to 132 Omani national students from various colleges and universities in Oman.
As of December 31st 2009, the company had staff strength of 237 employees and proudly achieved an Omanization level of 92.5%.

Corporate Governance
The company recognizes that is corporate governance practices are fundamental to the smooth and effective functioning of the organization and its ability to protect the rights of its shareholders and stakeholders and enhance shareholders value.
As a regulated Company by the Authority for electricity Regulation, Oman we continue to respond the requirements of the regulator.

Future Outlook
We are confident that the Company will continue its growth in 2010 financially and technically. Our strategy is to supply uninterrupted power to our customers and meet their expectations. The management has identified five objectives to achieve its strategic goals. These objectives provide the framework for actions to be taken in:
  * Initiate in implementing asset management system of the company.
  * Achieve return on investment of 7.5%
  * Achieve responsive & reliable services at 90%
  * Enhance empowerment and accountability by 100%
  * Embed HS & E culture in the business and comply with license conditions Numbers 7 and 17 
  * Maintain 100% compliance / articulate license conditions
To o achieve the strategic goals, MJEC will:
  * Implement an asset management system
  * Reduce the network losses to 14.2%
  * Reduce the power interruption by 20%
  * Implement the Scorecard system for each staff
  * Develop a staff appraisal system
  * Document all MJEC processes as process maps and improve them if required
  * Introduce timesheets
  * Develop the necessary manuals for all departments
  * Develop Service Level Agreements between departments
  * Enhance and modernize the Information technology infrastructure for better service levels


Appreciation
On behalf of the Board of Directors, I would like to express our sincere gratitude and thanks to His Majesty Sultan Qaboos bin Said for his wise leadership in directing us in the reform of the electricity sector and setting up MJEC.We take this opportunity to thank our management and employees for their continuing commitment and hard work.
Also I would like to thank our Board of Directors, Ministry of National Economy, Ministry of Housing, Authority of Electricity Regulation, Oman Ministry of Finance, Electricity Holding Company ,Tender Board ,contractors and other sector Companies for their effort and support  extended to the company.

Yahya S. Al Jabri
Chairman


 

 
Services

Services and Responsibilities of Majan Electricity Company.


Article numbers 90 and 91 of the sector law identify the duties and responsibilities of Majan Electricity Company.


Article (90)
(a)Undertake to finance, operate, maintain, develop and expand the Distribution System owned by it in a safe manner and in accordance with the relevant performance Security Standards, and shall offer terms for Connection with the Distribution System and use of the System on a non-discriminatory basis and equal opportunity.
 (b) To charge the Permitted Tariff or Cost-Reflective Tariff for Connection to its Distribution System, and shall have the right to disconnect services from the Customers who do not pay amounts due to it or to a Licensed Supplier.
 (c) To become a party to the Grid Code, and to implement, publish, develop and amend a Distribution Code.
 (d) To charge a Cost-Reflective Tariff to Persons Licensed to Supply from his System.
(e) Not to Connect an RAEC System without the approval of the Authority.
 (f) To acquire any Distribution assets from the Rural Areas Electricity Company in accordance with the manner specified by the Authority pursuant to Article (88) of this Law.
 (g) Undertake not to discriminate without legal justification in favor or against any Person when undertaking its regulated activities.
 (h) Undertake to design, construct, develop, own, operate and maintain International Interconnections in accordance with Article (115) of this Law.
 (i) To purchase all goods and services and manage them on the basis of Economic Purchase.


Article (91)
(a)To meet all reasonable demand for the Supply of electricity to Premises located within its Authorized Area, which are Connected to a Distribution or Transmission System on a non-discriminatory basis, and he shall publish the Permitted Tariff and Cost-Reflective Tariff
(b) To arrange for the meter reading and to submit bills to Customers and to collect amounts due to it in accordance with the conditions of its License.

(c) To pay a Licensed Transmission System Operator or a Licensed Distribution System Operator, in consideration for the use of the System, as the case may be.
(d) Not to acquire electricity other than from the Oman Power and Water Procurement Company and shall act as the agent of the Oman Power and Water Procurement Company in relation to the purchase of the Output of Autogenerators.
(e) Undertake not to discriminate without legal justification in favor or against any Person when undertaking his regulated activities.
(f) To purchase and manage all goods and services on an Economic Purchase basis.
(g) To charge Permitted Tariffs and Cost-Reflective Tariffs in consideration of all Supplies made by it according to the License granted to him and shall have the right to take all prescribed procedures in this Law in case of Customers who default on payment, including the termination of Supply.
(h) To acquire Supply business from the Rural Areas Electricity Company in the manner specified by the Authority


Regulated Activities
The company is primarily undertaking regulated distribution and supply of electricity in North Batinah, Al Dahirah regions and Buraimi Province under a License issued by the Authority of Electricity Regulation, Oman.
The following Regulated Activities are undertaken:


Destribution 
• Provide a safe and efficient distribution system.
• Re-enforcement of the distribution system.
• Providing extensions and connections.
• Compliance and development of the grid code and distribution code.
• Approving and managing of all capital projects.
 
Supply 
 
• Develop standard terms for supply.
• Supply electricity to premises.
• Procure electricity from PWP.
• Meter readings.
• Billing and credit control.
• Customer registrations.
• Collection of subsidy.
 
© 2010 Majan Electricity Co. All Rights Reserved