Burma Courier
June 4, 2001

Burma’s national power company will hold off on raising electricity rates because of inflationary fears, its deputy chief engineer told the Myanmar Times in an interview published in the June 4 edition of the English-language weekly.

“If we increase the present tariff rate, there will be other side-effects like that the prices of consumer goods will rise because of a conditional increment in their production costs,” said U Win Kyaw of the Myanmar Electric Power Enterprise.

MEPE charges differing rates for household, commercial and government use, but the average 5.5 kyat per kilowatt hour (less than $US 1 cent per kwh) is far below what the company needs to maintain and expand its power supply. MEPE estimates that construction and maintenance costs for the development of new plants work out to an average US$ 0.5 million to $0.8 million per megawatt of installed capacity.

Currently, the national power grid has an installed generating capacity of about 1,050 MW of all types but figures highlighted in a World Bank study a couple of years ago showed staggering losses of up to a third of the 4.5 billion kilowatt hours generated annually owing to technical faults in transmission and related problems. In Thailand and Malaysia such losses are limited to 12-15 per cent of annual production, while in Japan the figure is 6-7%.

A list of over a dozen hydro-power projects that MEPE has currently scheduled is provided in a box accompanying the article. However, work on nearly all of them is still at the site clearing phase in conjunction with the Irrigation Department of the Ministry of Agriculture The list includes seven dams sites in the Sittaung watershed where clearing began earlier this year.

Also mentioned are the much larger Yeywa (700 MW) and Shweli (300 MW) projects in Patheingyi and Namkhan townships that are said to have the potential to produce over 5 billion kilowatts of power annually. The military junta has been angling to get India involved in the construction of the Yeywa project. While the site for the Yeywa dam has been finalized, potential locations for the Shweli project are still under study.

The hydro project nearest to completion is the Paunglaung station near Pyinmana which will add about 900 million kilowatt hours to the national grid when it comes on-line in 2003-4.

With rate increases ruled out as a major factor, other potential sources of capital in the development of power are also being explored. “The formation of a power-development consortium of local investors and MEPE is now under discussion,” U Win Kyaw told the Myanmar Times. He said that the infrastructure needed to develop the Yeywa project was being studied in consultation with an unidentified European firm.

A paper prepared by a Japanese expert, obtained by the Times reporter, identified the limited availability of capital funds, doubts concerning the financial viability of foreign investments, poor access and security constraints and differences over agreements involving potential users of water resources as major factors retarding the development of new hydro facilities.

The article did not deal with natural gas-fired generation of electricity which currently provides more than half of national production. With inland gas production dropping and off shore production headed almost exclusively to Thailand to bring in desperately needed foreign exchange, the potential for expansion of gas-fired generation would appear to be severely curtailed.