Electricity sector: Suffering Industrialists & Indifferent Government

Enab Baladi Issue # 90 – Sun, Nov. 10, 2013

Abdulrahman Malik- Enab baladi

Electricity sector, the main lifeline of the Syrian economy has encountered large damage due to the continuous war in the country. During 2010, Syria’s production of electricity had reached 45.9 billion KWH however declined to the half after the outbreak of Syrian revolution. The reason beyond this decline is the lack of fuel supplies dedicated to operate the power stations.

The damage caused electricity cut off daily in between 4-12 hours in various Syrian provinces. As a result, Syrians found themselves using some primitive lightening tools such as kerosene lanterns and candles. Surprisingly, prices of those tools have doubled rapidly, so that a Syrian spends 100 Syrian pounds per day only for buying candles. Add to that, the higher demand on purchasing the electricity generators which has increased their prices by about 200%.

Emad Khamis, the minister of Electricity has revealed that the loss in the electricity sector has reached 24 billion Syrian pounds. He elucidated that the reason why the damage occurred is mainly because generating sets have become out of service. And thus, electricity cut off has been estimated at 470 million KWH which is equivalent to 5% of the gross demand on energy in the country. Not to forget  loss of more than 350 million Syrian pounds in cables, 26 million Syrian pounds in towers and columns given over to lightning and distribution, and 123 million Syrian pounds in transformers and technical tools and equipments. Plus, nearly 38 million Syrian pounds is the loss due to machine thefts, 300 thousand Syrian pounds loss due to stealing computers and offices’ furniture, and 7 million and 129 thousand Syrian pounds is the estimated amount of money stolen from bill collectors.

In relation to that, a resolution No.607 issued by the ministry of electricity has increased the rate of selling one kilowatt of electricity by 100%. That has applied to customers who receive electrical power on the tension of 0.4 K.V for their commercial, industrial, and craft purposes.

According to the resolution, the consumption slice ranged between 1 to 800 KWH per unit should be priced at 600 Syrian pennies after being only 250 Syrian pennies, which means an increase of 140%. Whereas, the consumption slice ranged between 801 to 2000 KWH per unit should be priced at 650 Syrian pennies instead of 350 pennies, which means an increase of 85%.

As a reaction to this resolution, industrialists have run campaigns using social networks to express their discontent. They also warn about the disastrous consequences that may badly affect the society in general and the industrial sector in particular if cost rates were increased.

Some economic studies have pointed out that increasing electricity pricing rate by 50% will badly affect most industries especially the cement industry. It will increase the price of one ton of cement to 410 Syrian pounds, which consequently will make the price of one ton of Iron 750 Syrian pounds higher. Not to forget the poultry sector, where poultry requires electric lighting and HVAC day and night. Therefore, collapse of what remains of the poultry sector will be highly expected.

The resolution mentioned above has come up as one item of a list of proposals prepared and issued by the ministry of economics last April. The aim was mainly surviving the current economic crisis by establishing a private electrical sector which directly sells electricity to citizens. This has revealed the government’s new trend towards privatizing the electricity sector. Raising electricity pricing could act as a first step towards privatization, when industrialists will welcome private companies to supply electricity for the Syrian market where permanent power in cheaper prices is desperately needed.