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Electric Power Minister promises to review price hike

Demonstrators took to the streets in a candlelit vigil on Thursday night to protest a recent hike in electricity prices. (PHOTO: DVB)

Speaking at a meeting with political parties at the Myanmar Peace Centre in Rangoon on Sunday, Burma’s Minister of Electric Power Khin Maung Soe apologised to the public for the recent increase in electricity prices and promised that the decision would be reviewed in parliament.

“I would like to extend my apologies for my shortcomings,” he said. “We will listen to the people’s voice and undertake procedures in accordance with suggestions by the union parliament. We urge political parties to point out our ministry’s shortcomings and oversights, and recommend what needs be done.”

His comments came after demonstrations and candlelit vigils against the increased electricity costs were held in Rangoon and Mandalay.

State media reported on Saturday that the Ministry of Electric Power would raise the issue of electricity rates in parliament. According to The New Light of Myanmar, Aye Mauk, the secretary of the Planning and Financial Development Committee, submitted an urgent proposal calling on the Union Government to review the Ministry of Electric Power’s announcement that November’s household electricity rates will increase by about double for every unit used over 100 kilowatts.

The current rate for supplying electricity to households across Burma stands at 25 kyat per unit. According to the ministry’s proposed hike, it is set to increase to 35 kyat per unit, and house owners who use more than 100 units will be charged 50 kyat per unit.

For commercial usage, the current rate is 75 kyat per unit, but is set to increase to 100 kyat, and 150 kyat per unit for businesses using more than 5,000 units per month.

Speaking at a Fisheries Association meeting on 5 November, Toe Nandar Tin, a cold storage factory operator, said that fishery companies would have to suspend cold storage operations if the electricity rates are increased. She said that her commercial electricity bill, previously fluctuating around 4 million kyat (US$4,000) per month, will jump to around $8 million if the price hike goes ahead. She warned that factories may be forced to close down and many jobs would be lost.

Asia Myanmar iron smelter Aung Myo also warned that Small and Medium Enterprises (SMEs) would be seriously affected.

“Doubling fees from 75 kyat to 150 kyat will be implausible for SME operators as we simply cannot afford to double the price of our products,” he said.

Meanwhile, it was announced last week that the Asian Development Bank (ADB) has offered Burma a cheap long-term loan of $60 million to reduce the power losses it suffers through operating antiquated and dilapidated transmission equipment.

Minister Khin Maung Soe admitted that up to 18 percent of electricity is lost during transmission, The Myanmar Times reported.

The bank loan recommended by the ADB will be used to build new power transmission infrastructure in areas outside Rangoon and Mandalay, which should lead to a significant reduction in electricity losses, Khin Maung Soe said, adding that the loan would be repaid over 24 years at 1.5 percent interest.

Burma has an overall electricity generation capacity of only 4,000 megawatts, compared with 30,000 megawatts in neighbouring Thailand, which has a similar sized population.

Much of the electricity distribution network is confined to a corridor between Rangoon and Mandalay.

Just 7 percent of all rural villages in Burma – a little more than 4,700 of nearly 65,000 small towns and village tracts across the country – are able to enjoy a supply of electricity from the national power grid. Nearly 13,000 villages, around 20 percent of the total number, attain electrical power from generators while some 21,000 are powered up by mini-hydropower, solar and biogas generators.