Ministry Reportedly Invited Electricity Tender Without Budget Approval

By Kyaw Hsu Mon 3 March 2017

RANGOON — Rangoon residents’ hope for 24-hr access to electricity is fading after the Ministry of Electricity and Energy said that it had no budget for two private electricity suppliers, which last year won a tender to provide electricity for the commercial capital.

In 2015, the previous government initiated a plan to deal with the power shortage in Rangoon Division during the summer months by inviting tenders from private electricity suppliers.

Hydropower production, the major source of electricity in Burma, is usually affected by rivers and creeks, which dry up in the hot, dry season at its peak in March and April.

The government of the National League for Democracy (NLD) suspended the plan after it came to power in March 2016, but resumed it in October, selecting two companies—Turkey-based Karadeniz Powership Energy Group (Karpower) and the American APR Energy.

According to the agreement, two electricity suppliers were set to provide Rangoon with 300 megawatts each, totaling 600 megawatts daily for the country’s commercial capital.

Karpower invited local Burmese media representatives to Istanbul, Turkey, last November and acquainted them with a 480-megawatt capacity power barge. The barge was built in Istanbul’s dockyard, and the launch was attended by Turkish President Erdogan.

The 300-meter barge was planned to arrive in Rangoon in April, be situated near Thilawa International Port in Rangoon, and provide 300 megawatts of electricity to the city each day for five years.

According to an initial agreement with the Burmese government, the electricity will cost US$112.24 per megawatt, said to be among the lowest electricity rates available.

Meanwhile, the US-based APR Energy was to establish a power plant in southern Rangoon. Rangoon Division chief minister U Phyo Min Thein also confirmed the arrangement for the power supply, saying that additional 600 megawatts of electricity would be supplied this summer.

However, the Ministry of Electricity and Energy said it had no budget to pay for the two electricity suppliers, according to local media.

Daw Nwe Nwe Win, director-general of the budget department within the Ministry of Planning and Finance, confirmed to The Irrawaddy that the Ministry of Electricity and Energy had not requested a budget for the two power suppliers in either the 2016-17 or the 2017-18 fiscal year.

“Now, both the financial commission and the government have drawn up the budget and submitted it to the parliament. And the [2017-18] budget does not include expenditure for two electricity suppliers, including the power barge,” she told The Irrawaddy.

The Ministry of Planning and Finance sets the budget limit for each ministry and they have to decide how they will spend the funds, Daw Nwe Nwe Win said.

For the 2017-18 fiscal year, the Ministry of Electricity and Energy put forward the figure of nearly 4.5 trillion kyats, more than 21.5 percent of the total budget. The parliament is still discussing the budget draft law.

“Usually, we grant a bigger budget for the Ministry of Electricity and Power. Last year, its budget accounted for 24 percent of the total budget,” she said.

According to procedures on government projects, tender is to be invited only after a budget is approved. However, in the case of the two electricity suppliers in question, tender was invited before the budget was approved.

The Irrawaddy contacted the information team of the Ministry of Electricity and Energy for confirmation, but representatives replied that questions could be put forward at the ministry’s press conference in Naypyidaw on March. 16.

Burma’s electricity consumption has been rapidly increasing—by 15 percent per year—and Rangoon alone consumes over 50 percent of the production (between 1,200 and 1,400 megawatts per day).

“There have been blackouts that often last for half a day now. If [the government] tells those companies ‘we can’t still do it because we don’t have the money’ after they have won the tender, we will lose face on the international stage,” said U Myat Thin Aung, chairman of Hlaingtharyar Industrial Zone.

The two power suppliers have not yet made press releases regarding the case.

Translated from Burmese by Thet Ko Ko