No Rate Hike Could Leave Electric Company Bankrupt

Minister of Industry, Mines and Energy Suy Sem acknowledged Thursday to lawmakers that the state-run Electricite du Cambodge is facing serious financial troubles without the approval of a rate-hike.

Electricite du Cambodge now charges residential customers 350 riel ($0.09) per kilowatt hour re­gardless of how much they use. Un­der a plan proposed in January, those using more than 50 kilowatt hours per month will pay 500 riel (about $0.13) for electricity use of more than 50 kilowatt hours.

Without higher rates, Suy Sem said, the utility may go bankrupt, as predicted by the World Bank and Asian Dev­elopment Bank.

The rate increase is being reviewed for a second time by EdC at the request of the ADB and World Bank. Both organizations have been critical of what they consider mismanagement by the utility, some of whose officials have been accused of stealing electricity and reselling it with the help of subcontractors.

“We and two donors are concerned that if we continue such cheap prices, we could collapse, or gain no money to pay loans back to these banks,” Suy Sem said. “And we can’t get any loans for development in the future.”

Suy Sem spoke during one of the National Assembly’s periodic “grilling” sessions, in which lawmakers quiz officials about what is going on in their ministry.

He outlined the ministry’s plans to extend and improve the electric supply within five years. Already, he said, the government is improving the electricity network in Phnom Penh suburbs and planning improvements in eight provincial towns with funding provided by the Asian Development Bank.

The ministry hopes to build dams to produce hydropower.  “We can produce up to more than 10,000 megawatts if we can get all the dams built,” he said.

Projects being considered include two 180-megawatt solar plants in Sihanoukville, and the Kirirom hydropower dam in Kompong Speu province.

Although Suy Sem spoke for more than an hour from a written text, Sam Rainsy Party lawmaker Sam Sundoeun called his report “useless.”

“In your 24-page report, you just discuss [electric] power” while barely mentioning gems and other mining, he said. “Min­ing,  damaging natural resources and the environment are important for the nation,” Sam Sun­doeun said.

 

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