Myanmar: Ministry Reportedly Invited Electricity Tender Without Budget Approval

Myanmar: Ministry Reportedly Invited Electricity Tender Without Budget
Approval

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.

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Link to Original Article:
https://www.irrawaddy.com/news/burma/ministry-reportedly-invited-electricity
-tender-without-budget-approval.html

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John Diecker
APT Consulting Group Co., Ltd.

www.aptthailand.com