UMFCCI, Yangon, Myanmar
Monday, June 13, 2016
The local broadcasting & media production company, 5 Network, interviewed Mr Zeya Thura Mon, at the meeting between the Union Minister of Ministry of Finance &Planning and private companies and Mr. Zeya Thura Mon explained his opinion upon the current electricity tariff subsidiary by the government, Distribution Sectors, Power Generation Technology, and Selling Gas to Overseas, which is summarized as below.
Subsidiary of Electricity Tariff by Government
The Government has been subsidizing the electricity tariff for many years. It will be more beneficial to the country, if the funds go to other sectors. When one unit of electricity is generated, it may cost 120 ~ 150 Kyats. However, payable electricity charge by customer is 35, 75, 120 or 150 Kyats depending on the type of customers. Since Government Distribution Utility receives only 70 Kyats per unit on average, whenever one unit is sold, there is a loss about 70 Kyats.
Many local companies, including our company and international developers can generate the electricity. Nonetheless, the cost of 120 ~ 150 Kyats per unit and the selling price of 70 Kyats, makes very difficult for the private IPP to absorb and subsequently, becomes bottleneck. So, the main Electricity Generating Body is Government and if the Government cannot generate sufficient electricity, there will be electricity shortage.
Chinese companies have been generating power in Myanmar since a long time ago from various sources. Previously, they built the hydropower plant, transmitted and sold to China, especially in border areas. Now Myanmar is in need of power, therefore, transmission systems are connected and purchased for Myanmar domestic usage.
Moreover, other than the Government owned power generation plants, there are private Independent Power Producers (IPP) expecting to sell power to the Government, who are Americans, English, Myanmar, Singaporeans, Malaysians, etc. Though there are so many potentials in power industry, if the Government purchases and resells at low price, there will always be a loss. So, let’s say the demand is 100, the government has to justify how many units they can purchase, depending on their budget availability, since subsidiary will be involved.
If the government still doesn’t wish to increase the electricity tariff, the electricity demand can’t be fulfilled. They need a budget agreement for subsidiary of electricity. As an example, you want ten dishes of Mohinga (fish noodle soup) for ten people, which cost 150Kyats per dish. But if your return is 75Kyats, you may need 75Kyats more and ask for a grant for 75Kyats. If you can’t get a grant, you are able to buy only five dishes. So, out of ten people, only five people can have Mohinga and other five can’t have, which shows the shortage of supply.
That is a main problem area that Ministry of Planning and Finance should focus. The message is for the Government to stop subsidizing and to stop selling at low price and the Myanmar citizens to take note that the consistency of the electricity is dependent on how much they are willing to pay.
Distribution structure is the country dependent whether to be privatized or government-owned. Currently, government enterprise (EPGE) purchases all the electricity from all the IPPs, and sells back to Yangon Electricity Supply Corporation (YESC), Mandalay Electricity Supply Corporation (MESC) and Electricity Supply Enterprise (ESE), which distribute the electricity to the public in return.
Besides, Yangon should have the underground cables systems, so that it can be shaded by beautiful trees but no power cables damaged due to the trees collapsed by the storm. A decade ago, there was a cyclone Nargis in Myanmar, and some townships restored the electricity within a short period of time since there was no overhead power distribution line, and electricity was re-connected after checking the stations one by one.
Power Generation Technology
According to our Company’s policy, we should not apply the technology which can impact the environment, such as, Coal Power Generation. Furthermore, the financing loan is quite challenging, air pollution is to be managed, and technology is difficult for Coal. Clean Coal, which is being used by Japan, is very costly even though the technology is high.
Currently, Most widely used in Myanmar is Hydro Power Generation plant, but the construction takes time, which is about 6 to 8 years. As for the short term solution, possibilities are Liquid fuel and Natural gas.
View on the Selling Gas to Overseas
Selling gas to overseas should not be related to the shortage of electricity supply any longer as it was over. For example, there were 10 dishes of Mohinga (fish noodle soup) available in one shop, but you initially wanted and bought only 3 dishes and the remaining 7 dishes were sold to other customers. At present, if you want 10 dishes (additional 7 dishes) which have been sold out, you can’t buy from the same shop, but you need to find from some other shops.
(Source of Video: 5 Network)