Analysts accuses MIC of 'no transparency'

Published on Sunday, 13 January 2013 08:15

Land prepared to construct power project of Toyo-Thai Corporation Public Co., Ltd(Photo-EMG)

Some analysts accused Myanmar Investment Commission (MIC) of the lack of transparency on approving the power project of a Thai firm to operate in the country.

MIC permitted Toyo-Thai Corporation Public Co., Ltd to invest in a power plant in Alone township on ‘build, operate and transfer’ (BOT) agreement on January 2, according to the Directorate of Investment and Companies Administration (DICA).

“It’s true we need power projects, but we also require transparency in order to avoid such ordeals as Latpaduangtaung Coppermine case and Myitsone hydropower dam case. We should know how much the company will charge the government for a unit of electricity; if there will be changes in electricity charges for the public; where the company will buy natural gas; or if the company will explore gas in cooperation with the government. They should disclose such information. Public will accept if it brings benefits to them. The most important thing is transparency here,” an observing scholar said on anonymity.

“The plant will produce electricity to sell, and transfer it into the national grid. MIC agreed with it,” an official from DICA said.

Analysts agreed that the country is in need of such investments in energy sector, because only a total of 1,600 megawatts is actually produced although the total capacity of 30 power plants (19 hydropower, 1 coal and 10 natural gas plants) in the nation is 3,494.9 megawatts. Moreover, power requirement is expected 15% increase yearly along with inflows of foreign investments.

On the other hand, they are against the fact that it was not disclosed in which way the electricity will be produced and distributed, and how much it will charge to the public for its electricity. They are of the opinion that the public should know what will impact them.

Scholars point out the need of rules and laws which require such power projects to be transparent and systematic.

“We already had previous lessons (about impacts of lacking transparency in implementing projects). Now that we can mend our ways, we should not repeat our mistakes. If power projects will be given to private organisations, the authorities should form a national power policy-making body, which will make Independent Power Producer (IPP) Law for all to conform. If required, international experts should be hired to standardize the technology, machines used, and so on. In fact there should be a handbook to be more systematic,” said a scholar who just visited and studied the Ratchaburi Power Plant in Thailand.

“Energy minister said they are producing electricity from natural gas on loss when they sell 121 Kyat (US$0.15) per unit. So just think how much Thai company will charge for a unit of electricity. No company will take a loss project. So, they should at least tell what price they will set and how they will buy gas,” the expert commented.

“Myanmar produces electricity on loss using its own natural gas and selling at 121 Kyat per unit. Thailand buys gas from Myanmar, import it into the country and produce electricity, and it costs around 78 Kyat per unit. Why so? That is why I say we need transparency,” the scholar said.

There are more 75 hydropower and coal power plant projects on the planning process, and analysts and scholars are calling the authorities for rules and laws, and enhancing transparency in the industry practices.