Friday, 21 March 2014

Myanmar's Lawmakers Approve Government Move to Hike Power Rates

Myanmar's parliament on Wednesday approved an increase in electricity rates beginning next month amid concerns that the unpopular move will trigger a rise in the price of goods and services.

Previous government moves to raise power rates have met with protests. In November last year, parliament rejected a government attempt to jack up rates.

Lawmakers were skeptical about the new rates on Monday when the government sent the proposal, but a majority of them relented and dropped their opposition two days later.

"Can the authorities give assurances they will improve services? They can’t. This latest hike will surely double prices of consumer goods,” Sanda Min, a lawmaker from opposition leader Aung San Suu Kyi's National League for Democracy, told RFA's Myanmar Service.

“What kind of services can the Ministry of Electric Power guarantee if people pay more? Will we get full voltage? No power cuts?," asked another NLD MP Khin San Hlaing.

Citing frequent and long-lasting power cuts, she said that in spite of paying already high electricity rates, residents "spend more on candles and diesel oil for generators to get electricity."

Myanmar's capital Yangon especially has been hit by power cuts and brown-outs as demand outstripped supply in line with mushrooming businesses following easing of international sanctions since the reformist Thein Sein took office in 2011.

The intermittent power supply forced many to use the usually diesel-fueled power generators, which can be much more expensive than using power from the national grid.

Funding power investment

Minister of Electric Power Khin Maung Soe told parliament that electricity rates had to be raised to fund more investment in the power sector as consumption across the country was rising by about 15 percent a year, the government-owned New Light of Myanmar newspaper reported.

President Thein Sein’s office believes the increase in power rates will have little impact on most families and small-and medium-sized businesses but will reportedly save 272 billion kyat, or about U.S. $272 million, from the government’s annual spending on supplying power, according to the Irrawaddy online journal.

Under the changes, rates for households using less than 100 kilowatts per month will remain at 35 kyat (less than U.S. $0.04) per unit. They will rise to 40 kyat (U.S. $0.04) per unit for those using between 101 and 200 units a month, and to 50 kyat (U.S. $0.05) for those using more than 200 units.

For businesses, the basic charge for users of less than 500 units per month will remain at the current level of 75 kyat (nearly U.S. $0.08) per unit. Those using over 500 units will pay 150 kyat (U.S. $0.15) per unit.

According to government data, nearly 60 percent of households do not use more than 100 units per month while almost 60 percent of businesses use less than 500 units.

Minister Khin Maung Soe said the new rates will be effective April 1, assuring that he would rebut the criticism over the changes.

"I will explain about the hikes at a later date as I need to have accurate data to reply to their comments,” he told RFA.

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