State Utility Owed Millions

EdC Apparently Reluctant to Ask Officials to Pay Up

High-ranking officials and government institutions owe the state electricity company millions of dollars, top officials at the utility said Monday.

Electricite du Cambodge senior officials were reluctant Monday to divulge details about the debtors, but admitted many top government officials and key ministries have not paid their bills for months—and maybe years.

At the end of 1999, the state utility was owed approximately 60 billion riel, or nearly $15.8 million, by late-paying customers, most of whom were officials and government institutions, Men Sarun, executive director for EdC customer service, said at his office.

EdC General Director Tan Kim Vinn cautiously said government leaders need to clear the outstanding debts.

“Now we’re working on the financial issues with cabinets of high-ranking officials,” Tan Kim Vinn said at his office.

He also said the utility’s operations were being threatened.

“The outstanding debts affect the EdC’s business,” Tan Kim Vinn said.

EdC officials refused Monday to confirm the identities of officials and institutions late in paying and admitted they have not been penalized for their tardiness.

“Because the government has been helping the EdC to run businesses in many ways, that’s why we didn’t want to publicize their debts,” Men Sarun explained.

But while top officials and the government apparently have not been paying the EdC on time, international donors have sent the state utility tens of millions of dollars in the form of low-interest loans and grants in recent years.

Urooj Malik, the Asian Devel­opment Bank’s country representative, said Monday that as far as he knows government leaders and institutions must pay for power just as civilian residents do. He said the payment irregularities will be looked at closely by bank representatives.

“The ADB is now undertaking the review on EdC’s financial performance,” Urooj Malik said by telephone. “It needs to be very carefully reviewed in order to strengthen its financial performance. Before proceeding with the next loans, the EdC’s financial governance should adequately meet the World Bank and ADB requirements.”

The inability of the EdC to collect its debts was first revealed by the nation’s most widely-read Khmer-language newspaper, Rasmei Kampuchea (Light of Cambodia), more than a week ago. Other local newspapers followed suit. Odomkate Khmer (Khmer Ideal), an opposition newspaper, and Chakraval (the Universe), a newspaper generally supportive of the CPP which has been railing against corruption in recent months, both listed influential debtors’ names, their customer numbers and the amount of the debts.

The information printed in the newspapers came from internal EdC documents, the utility’s officials confirmed Monday, though they did not know the dates of the documents.

Top CPP officials, including Prime Minister Hun Sen, Senate President Chea Sim, Cabinet Minister Sok An and RCAF Commander-in-Chief Ke Kim Yan, are among the alleged debtors cited in the local newspapers. National Assembly Presi­dent Prince Norodom Ranarridh made the lists for Funcinpec.

Tan Kim Vinn expressed regret that the issue has become so public.

“Local newspapers published the outstanding debts by top officials without permission,” he said. “We have never allowed them to make it public. The newspapers hurt the reputations of the high-ranking officials. They are very upset.”

According to the lists in the newspapers, Hun Sen’s residence at one time owed 298 million riel, or $78,500, and his cabinet office, was late in paying 377 million riel, or $99,300. And Chea Sim allegedly owed 352 million riel, or $92,600 for electricity for his residence as of an unidentified date.

Government officials cited in the newspapers as failing to pay their bills denied the charges, noting that institutions might owe money but not individuals.

A half dozen top officials or their aides were contacted Mon­day by The Cambodia Daily and all admitted no outstanding debts for electricity, except a representative for Hun Sen, who said the premier intends to pay.

Buon Lim Heng, director of financial department of the Council of Ministers, admitted the office of the prime minister owed $83,200 for his cabinet and $15,000 for his residence at the end of 1999.

“We paid the bills for the first three months of 1999, but the rest could not be paid for lack of budget,” he said, explaining that the Council of Ministers used 1999 funds to pay old debts from 1997 and 1998. “We will pay the rest later, gradually.”

Khieu Thavika, a government spokesman, maintained Monday that the Council of Ministers has been late in paying its power bills due to “technical problems.”

“EdC sent its invoice to a wrong place,” Khieu Thavika said. “If we have received the invoice, we would have asked the Ministry of Finance to pay the bill. We will pay. We will pay the debts.”

Defense co-Minister Tea Banh admitted that his ministry owed the EdC money but not himself. “If I owe the money to EdC, they must cut my power,” he said.

Chea Son, Chea Sim’s cabinet chief, said that the news reports on his cabinet’s debts were incorrect. “We have paid the bill every month. We have never delayed the payment,” he maintained.

Tan Kim Vinn and other top EdC officials expressed concern Monday that the financial problems could jeopardize its relations with international donors, and adversely affect its ability to provide electricity to millions of residents.

The refusal of customers to pay squeezes the EdC’s financial position, which is already poor due to government requirements  that it must sell power at 350 riel per kilowatt hour, a rate which is below the actual cost of production. “EdC cannot do business like a private company,” Tan Kim Vinn complained.

The unhealthy financial position of the utility is not up to the standards of the two biggest international, the World Bank and Asian Development Bank, he said.

EdC has received nearly $189 million in loans and grants from international donors since early 1990s. The money from the two powerful international financial institutions account for $101 million, according to the utility.

The utility has now started a probe to determine how internal payment information was leaked, and search for routes that enabled staff to access to the EdC’s financial computer system, officials said.

The EdC normally cuts electricity to customers who repeatedly are late in their payments. However, those internal  regulations were never applied to government leaders and public offices, EdC officials said.

(Additional reporting by Thet Sambath)

 

 

 

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