Despite reforms at Electricite de Cambodge, some Phnom Penh customers still pay more than the established rate due to the emergence of private cable line owners, EdC officials admit.
Pushed by the central government, the EdC last year successfully rid the capital of virtually all private sub-station operators, who sold power at inflated prices to primarily residential consumers, EdC officials and industry insiders say.
But the state-owned utility now cannot control private cable line owners, who make a business of selling power to their neighbors for more than the set rate of 350 riel per kilowatt hour, according to EdC officials.
“We still have problems,” said Nou Sokhon, the EdC’s director of distribution and transmission.
The problems, generally, are private deals between “rich” households and their neighbors who live just outside of EdC’s distribution line coverage areas, Nou Sokhon said. Unlike customers near a primary EdC distribution line, residents living more than 500 meters away from such a line are required to install a cable to connect and pay a bond deposit of about $14, he said.
Not everyone is interested in paying $14, so some customers connected to the primary line allow others to share the cable, Nou Sokhon said. Private cable line owners charge neighbors for electricity, for guards hired to protect the cable and for depreciation of the line and charge significantly more than EdC, he explained. EdC officials are not assisting the private line operators, he added.
“EdC cannot control customers far away from the distribution lines,” Nou Sokhon said. “[The private line owners] are just other customers and do not need to get any license. There’s no way to control them.”
The utility does not know how many customers are relying on the private cable lines, he added.
By late last year, the EdC had reclaimed control of all of the remaining 86 sub-stations in Phnom Penh operated by private wholesalers, Nou Sokhon and other EdC officials maintained.
“We made a success to take back all sub-stations operated by wholesalers,” said Nou Sokhon.
The government decided to eliminate the wholesalers last year following public outcry about a plan to raise electricity rates around the city. Officials decided it was wise to sideline the private wholesalers before raising prices.
Private cabin operators, who were set up in 1991 by the Phnom Penh Municipality to protect the power supply from thieves, had sold electricity for as much as 600 riel per kilowatt hour.
In Phnom Penh until last year, of the functioning 300 sub-stations and 200 pole-mounted transformers, approximately 170 were privately operated by wholesalers, according to the EdC.
Wholesalers had been required to pay 2 million riel (about $530) to get a license for setting up a cabin box. After they installed cables linking to the homes of their customers, they bought power from EdC for 280 riel per kilowatt hour, according to officials and former operators. They checked the meters every month and collected money from customers. Most cabin operators served 500 to 1,000 households, they said.
After the government order to eliminate wholesalers was made in September 1998, the public utility bought or rented distribution network equipment such as cables and poles from the private wholesalers.
The EdC has been replacing the old sub-stations and distribution networks with new systems as part of donor-funded rehabilitation projects, said officials.
By the end of this year, only 26 of the old-style sub-station distribution networks will remain in use, but they too are scheduled to be rehabilitated by another donor-funded project in 2000, officials said.
During the interim period, EdC assigned staff to monitor the old sub-stations, checking meters and collecting money. Under the new distribution systems, customers pay their bills directly at EdC offices, officials said.
Nhem Thavy, director-general for independent power provider Cambodia Utility Power Ltd, said all sub-stations are under EdC’s control and no wholesalers are distributing power illegally.
A former wholesaler who used to sell power to about 700 families near the Tuol Sleng Museum said her business is finished.
“Now we have lost our business,” she said, asking not to be identified. “We had invested about $10,000 since we started business in 1989 and EdC gave us no compensation [last year].”
She said she bought power for 280 riel per kilowatt hour and sold it to regular customers for 400 riel and small businesses for 450 riel. She made profits of 50 riel to 100 riel for every kilowatt hour she sold, totaling about 5 million to 10 million riel (about $1,300 to $2,600) every month in recent years, she said.
She and other wholesalers, most of whom she said were spouses of public servants, were upset when the government announced the elimination of cabin operations, but they had no choice except to follow the order, she said.
EdC officials said the current unauthorized practice of private cable line operators is a temporary phenomena and will be gone when EdC finishes distribution line rehabilitation projects supported by the World Bank and Asian Development Bank by the end of this year.
However, the new power distribution system does not cover capital’s squatter communities, in which hundreds of thousands of people live road sides, along train tracks and the roofs of buildings.
To provide electricity to families living technically illegally, EdC asks each squatter community jointly to install a cable line connecting to the EdC line to share the power within community.
In this deal each community member shares the extra cost in addition to the usage. Currently about 50 communities are in the special deal with EdC, officials said.
Cambodian residents of Phnom Penh have paid the same price for electricity for years, but the EdC in February raised prices for government offices, foreign residents, and businesses, including hotels.
(Additional reporting by Kay Kimsong)