State-run Electricite du Cambodge and government officials on Monday recommended that the cost of electricity to the consumer be increased by around 11 percent, officials said following a roundtable discussion of the issue.
Participants said that the rising price of petroleum internationally has badly hurt EdC, which relies heavily on petroleum-powered generators to produce electricity.
“We have recommended to the government to raise the price about 11 percent but it is up to the government to make a decision,” Ith Praing, secretary of state at the Ministry of Industry, Mines and Energy, said by telephone.
“It is a difficult decision to make,” he added.
Ith Praing said the government is weighing the effect of the possible rate hike on the living conditions of ordinary Cambodians, but must also take into account the ability of EdC to survive financially.
The roundtable discussion, which will be broadcast on state-run TVK in coming days, was attended by representatives of the Ministry of Industry, Mines and Energy, the Electricity Authority of Cambodia and the Ministry of Finance.
EdC has lost “a huge amount of money,” over the last few months, EdC Director General Tan Kim Vin said by telephone.
“If the government does not help us, our state-run company will be bankrupted,” he added.
Tan Kim Vin emphasized that the government will set the new price, not EdC.
Currently, electricity usage up to 50 kilowatt-hours is charged at $0.08 per kwh. Those who use up to 100 kwh are charged $0.13 per kwh, and those who use more than that are charged $0.15 per kwh.
Chea Sun Hel, director of EdC’s distribution department, said an 11-percent price hike would be just enough to allow EdC to survive. “Then the cost and sale price will be equal,” he said.
Chea Sun Hel added that EdC is in “financial crisis.” “We have difficulties paying our debts to our business partners. We have been pleading to delay paying the debts,” he added.
In June, Sokimex oil tycoon Sok Kong demanded that EdC pay $5 million it owed him or he would stop shipping petroleum to the company. EdC started paying Sok Kong in July.
International Business Club President Bretton Sciaroni said he has met with EdC officials about electricity prices recently.
“Cambodia is being held hostage by rising oil prices,” he said. “It must move away from dependence on crude oil. The government should not continue to license power plants that use oil.”
Sciaroni said that hydropower, along with linking the electricity grid to Vietnam and Thailand, has to be part of the solution to Cambodia’s high electricity costs, which already deter investors.
Garment Manufacturers Association Secretary-General Ken Loo warned on Monday that electricity price increases would deal a blow to Cambodia’s garment industry. The government should provide special electricity concessions for industry, he added.
“If it could be implemented without abuses then we would favor a concessionary electricity rate for industry,” Loo said. “Factories could use their own generators; another thing to look at is a tax exception for diesel imported for industrial uses,” he added.