HomeMMBIZ NewsMyanmar Parliament Suspends Electricity Price Hike

Myanmar Parliament Suspends Electricity Price Hike

Myanmar’s parliament on Tuesday temporarily suspended the authorities’ decision to hike electricity prices following an interim proposal that urged the government to halt the decision made on October 29.

The parliament made the resolution following days of protests in Myanmar’s commercial capital Yangon and second-largest city Mandalay.

Rejecting the clarification by minister for electric power U Khin Maung Soe on raising the prices, the parliament set the issue to remain under review until the start of 2014-15 fiscal year.

“We will charge new electricity rates in the 2014-15 fiscal year,” U Khin Maung Soe said, citing demands to review the implementation of the new rates by lawmakers, manufacturers and the public.

U Khin Maung Soe maintained that the hike in charge for consumption of above 100 units of electricity has “no effect on ordinary people who usually consume less than 100 units, as the charge less than 100 units remain unchanged at K35 per unit.” However, he apologised for not keeping subscribers informed ahead of the move.

The Yangon City Electricity Supply Board (YESB) under the ministry of electric power announced on October 29 an almost two-fold rise in electricity prices starting immediately from the month of November, in a bid to “cover the production and purchase cost of electricity to a certain extent.”

According to the announcement, power price for public household who consumes 100 units of power or more will be raised to K50 (5 cents) per unit from the previous K35, while that for public industry and enterprises on consumption of above 5,000 units will be raised to K150 per unit from K100.

Residents and activists staged protests following the announcement in Yangon while lawmakers and local manufacturers criticised the timing of the move. The parliament on November 8 adopted an interim proposal demanding to bring down the electricity fees in the wake of massive public indignation. Demonstrators holding lit candles threatened to keep taking to the streets if electricity fee was not reduced.

More power plants

The minister said Myanmar needs to build more power plants in a bid to provide more electricity coverage and to satisfy the public demand.

“If we don’t do this, the nation will face difficulties until 2020,” he said. “We have electricity now because the previous government built power plants using international loans.”

Under a 30-year electricity strategic development plan, the country’s power supply capacity in fiscal year 2012-13 should have been 4,910MW, he said, but only 3,600MW was installed.

According to the plan, Myanmar has to have power generation capacity of 8,929MW by 2020, but there will be a shortage of around 5,000MW as the country failed to build seven hydropower projects, three thermal and two coal-fired power plants, he said, attributing the failure to financial difficulties.

He said Myanmar’s power consumption, which has increased by 15 percent annually, is likely to reach 3,000MW by 2015 with summer power demand estimated to stand at 2,370MW in 2014.

The minister disclosed that the current power stations can generate a maximum of 1,655MW, emphasising the need to build three power plants each with an installed capacity of 500MW at a cost of $2.1 billion to meet the power demand 4,000MW in 2016.

He called for local and foreign investment in the projects, saying that the government alone cannot afford to implement it.

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