What’s Stopping Myanmar From Modernizing its Electricity Sector?

By The Irrawaddy 23 May 2020

Ye Ni: Welcome to Dateline Irrawaddy! This week, we will discuss electricity production and distribution in Myanmar and lessons to learn from Vietnam on electricity and energy sector reforms. Electrical engineer U Myint Zaw joins me to discuss this. He tried to produce meter boxes in 2003 and demonstrated advanced metering infrastructure (AMI) in Naypyitaw in 2006. Since 2019, he has been involved in installing AMI in Naypyitaw.

Last week, people complained about high electricity bills, prompting the Ministry of Electricity and Energy to hold a press conference. Electricity buyers think they do not get the proper value for what they pay. The permanent secretary of the Ministry of Electricity and Energy said in the press conference that the ministry’s staff guess the amount of electricity units used by households without actually reading their electricity meter. It is an old method to go to households and read their meters. Shouldn’t it be replaced with a digital system? If so, the billing system would be reliable, the ministry would no longer need staff to read meters and it could control the system with computers. Isn’t there such a system? Why can’t such a system be introduced?

Myint Zaw: Technological changes started to take place in 2000 around the world. The induction meter has been used in Myanmar since we were young. We called it the mechanical [meter]. Digital meters emerged in 2000.

In 2003, countries around the world, especially China and India, strived competitively for industrial development. China and India strived for industrial development only after 2000. They were not that industrially developed before. They strived for development of both industry and energy.

As we were trying to produce some [electricity] products in Myanmar, we studied their efforts. The Tatmadaw [military] government, with their stated aim of establishing an industrialized nation, held an industrial exhibition in Mandalay. I remember that they articulated their ambition to turn iron foundries into factories.

As we were young then, we studied enthusiastically in order to make digital meters. We made proposals to the [Electricity] Ministry and presented our plans. We told them that the digital system will need less labor and can be controlled online from the head office. To our surprise, the ministry rejected our proposal, saying the time is not yet ripe, and they would continue to use mechanical meters. So we left the ministry.

In 2006, [the military government] again spoke of industrialization. So, we demonstrated the digital system. The system worked, but those with authority said the new system would “break the rice bowl” of the meter-reading staff. We should understand that lower-level staff members in the administrative mechanism of this country have to make use of their little authority in different ways to make ends meet—it is the reality. Also, the highest-level officials in the electricity ministry know the meter-reading staff and linemen have to make ends meet within their scope of authority. So, to avoid hurting them, the authorities did not switch to the new system though they know that it is good.

But it is not fair to put the blame on meter-reading staff and linemen alone. Mid-level personnel are also involved. It is the reality that lower and mid-level personnel made use of their authority to make ends meet.

My suggestion is that the government introduces a digital system and, at the same time, provides technical training to them and pays them higher if they become proficient in their field. The latest technology is the AMI. A data center for AMI is being constructed in Naypyitaw. It can read the meters across the country every 30 minutes, not just monthly. By using this system, electricity users can buy prepaid electricity like they buy top-up credit for their phones. So they can buy electricity depending on their budget. They can also get credit on loan from the electricity ministry if their credit runs out.

We have the technology, so the policy that guides the ministry is the most important thing. Privatization is also necessary. The government ministry should only handle budget, corruption and excess workforce. It is easier for private companies to make effective use of the latest technologies.

YN: In the past, there was resistance to reforms, but at present, we are undergoing political and economic reforms. You said privatization must be done regarding electricity distribution. How much has the electricity distribution system been reformed?

MZ: The Tatmadaw government tried to make two reforms: in 2003, it introduced computer billing, which is similar to the digital system, in six downtown townships [in Yangon]. The meter-reading staff visited houses to read meters and bill sheets were typed on computers and printed out. The format of the current bill sheets was designed at that time. Previously, the bills were typed on brown paper. When the government made reforms to introduce computer billing in 2003, the difficulty was that the companies [that prepared computerized billing sheets] charged them for the sheets. Customers had to pay an additional amount for billing sheets on top of their electricity bills, so it was not actually much of a reform. It was just developing a business model.

As computerized billing achieved some success in Yangon, authorities planned to expand their services to other areas outside Yangon like Taunggyi [in Shan State]. Then, meter readings on pin cards were sent by plane from Taunggyi to Yangon. The bills were printed in Yangon and the printouts were then sent back to Taunggyi by plane. Then, the system ceased because it was not practical.

The Tatmadaw government thinks like the Tatmadaw. It could not become a corporate business. There was only one Electricity Ministry in the past. Under U Thein Sein’s government, it was divided into two. The intention is to exercise checks and balances as the first electricity ministry is tasked with producing electricity and the second electricity ministry is tasked with selling electricity. The second government after the democratic transition combined the two along with MOGE [Myanma Oil and Gas Enterprise]. This was also done before, under U Nu’s democratic government [in the post-independence period]. I mean the reforms in Myanmar are never new ones, and they reach nowhere.

YN: Our neighboring countries have also reformed their electricity ministries and many are talking about the example set by Vietnam. Could you explain electricity sector reforms in Vietnam?

MZ: In Vietnam and Thailand, their electricity systems contribute a lot to their economies. Electricity plays an important part in economic growth. As I studied Vietnam’s example recently, I found that there is no longer an electricity ministry in Vietnam, which exercises single-party communist system. It is neither a democracy nor a market economy. There is no longer an electricity ministry even in such a country. It established a large corporation, Vietnam Electricity. There are 12 smaller companies under it. Some produce electricity and some distribute it. Sub-dealers sell electricity at lower prices in working class places, like Hlaing Tharyar in Myanmar, and at higher prices to affluent neighborhoods.

I was amazed that Vietnam successfully reformed its wholesale and retail system. Electricity prices are fixed on different ranges for different groups of people, for example, students and those who stay at hostels. The wholesalers control the prices depending on the different segments to which electricity will be sold. The government policy is simple. For example, if a sub-dealer will sell to users in an affluent neighborhood like Golden Valley in Myanmar, the wholesaler sells to him at higher prices. Prices are set differently for users in detached houses, high-rise buildings and condominiums.

The government privatized the businesses, so meter-reading staff are no longer necessary. The digital meter system has been 100-percent implemented in Vietnam. The meter box includes a clock and calendar, and it records the electricity units that users consume. Staff do not need to go to see the meter box in person and electricity usage can be checked online.

Though people say the electricity supply is government-owned in Thailand, this has changed now. The Thai government is still partly engaged in electricity generation to avoid national power outages, but it now only holds a 10 percent stake in electricity distribution. It has privatized it 90 percent. We should learn from other countries about how they practically reformed their electricity sectors to improve their economies and daily lives of their people—we should compare our reforms with theirs.

YN: Thank you for your contributions!