Posted by Joshua on Sunday, November 4th, 2007
EIU responded: Date: November 4, 2007
Hosam, sure there is an issue regarding the social impact of cutting subsidies. But it is undeniable that the impetus for the long overdue structural changes to the Syrian economy is coming from non-Baathists, and these arguments are being at best grudgingly accepted by the party. I would also dispute the cntention that cronyism is not critical to this debate.
On the electricity issue, the government’s case is summarised in a recent EIU report:
The government also faces a considerable financial burden in maintaining electricity supplies, both from subsidising tariffs, which are below the cost of production, and, more importantly, from financing investment in new generating capacity. At the start of September the Ministry of Electricity put into effect a new schedule of electricity tariffs based on a sliding scale, with heavier consumers obliged to pay much higher rates. For domestic consumers there are eight bands, ranging from a nominal charge of S£0.25 (half a US cent) per kwh for those using 100 kwh in the two-monthly billing period to S£4 (8 US cents) for those using 2,001 kwh/y and more. For the highest band the entire electricity supply will be charged at the top rate; users of 2,000 kwh or less will be charged on a staggered basis. According to the electricity minister, Ahmed Khaled Ali, the overall charge for the mean household consuming 800 kwh per billing period will actually come down to S£710 (US$14) from S£810 previously. He did not specify the extent of the increases in charges for higher users. He said that rumours to the effect that bills would henceforth be charged monthly were unfounded. For industrial users, charges will range from S£150 to S£500, depending on the time of day (with the highest charges during domestic peak times—in the evening).
Household electricity tariffsa
Consumption (kwh) Tariff (S£)
2,001 and above 4.0
a Based on a two-monthly billing period.
Download the numbers in Excel
Mr Ali said that in 2006 Syria’s total electricity consumption rose by 8%, compared with the previous year, to 37.7bn kwh. The system has shown the strain during 2007, with regular power cuts during the summer months, when demand peaks owing to increased use of airconditioners and supply is affected by falling water levels behind the Tabqa and Tishreen dams on the Euphrates river, which account for about 20% of totalled installed capacity of 7,500 mw. Mr Ali said that the situation has improved owing to the recent start-up of a new 150-mw unit at the Nasiriya power station in Damascus; a second 150-mw unit is scheduled to come into service at the same plant in late October. Over the next two years two 750-mw combined cycle plants, at Deir Ali and Deir al-Zour, are also set to come on stream, and a further 2,000 mw of new capacity is planned by 2010. Mr Ali said that the total cost of the ongoing and planned power station projects is about US$6bn. The bulk of the financing for the projects that are now under way is coming from the European Investment Bank and Arab development agencies.
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