Wednesday, September 19, 2012

Iraq’s Electricity Minister Once Again Fails To Reach Its Mark

Every year Iraq’s Electricity Ministry says it will reach certain levels of production. These are all steps that are eventually supposed to end the country’s long standing power problems that date back to the 1991 Gulf War. This year for instance, Baghdad promised to raise production some 3,000 megawatts to 9,000 by August 2012, and that it would end all of the power shortages by 2014. What ended up happening was that the government failed to reach its mark this summer. This is leading to increased criticism from parliament, and even more from the public. While overall output has continued to grow, so has demand, which means there are continued black outs. The result is that when it comes to electricity, very little from the authorities is believed.

This summer the government promised, but failed to achieve a large increase in electricity production. At the end of August 2012, output was at 5,842 megawatts. Demand at the time stood at approximately 15,000 megawatts, and August’s figures were below the average for the second quarter of the year, which was 6,200 megawatts. The cause of the drop was a series of technical problems. First, a fuel pipeline blew up, and there was a problem with pressure in another, which reduced the power supply by some 1,400 megawatts according to the Electricity Ministry. By July, the Ministry was supposed to reach 7,450 megawatts, and 9,000 by August. This was just the latest example of Baghdad failing to achieve its goals. It also brings into question its claim that it will end all of the country’s power problems by 2014. It is repeated setbacks such as these that cause widespread cynicism amongst the public when it comes to government announcements about electricity.

Despite the continued shortages, the Electricity Ministry revived plans to charge the public for usage. At the end of August, the Ministry said that it wanted to install pay as you go meters on households. Residents would have to prepay to ensure their supply of electricity. Electricity Minister Abdul Karim Aftan said that he wanted the meters to be tested in the Karkh and Rusafa districts of Baghdad first to go along with a public relations campaign to inform people about the new rules. Iraqis are already supposed to pay for their usage, but because the supply is so bad few do. The government has attempted to use fees as a way to contain demand in Iraq before, but the plans have always failed. In June 2010 for instance, the Ministry said it would double charges for usage in an attempt to cut consumption. Then when protests broke out over power shortages in early 2011, the government said it would give away a free amount of electricity to appease the public. The government would later undercut its own program when the cabinet voted for subsidies for power bills. In the end, few seemed to pay attention, and the government claimed it was owed billions of dinars in unpaid bills. Installing meters would obviously be a firmer way to ensure that fees were taken care of. Given the authorities previous spotty record, and the intense anger that electricity shortages instill, going ahead with this idea, might cause even more resentment, and therefore lead the government to back down once again.

The Electricity Ministry’s continued problems are leading to increased criticism from parliament. At the beginning of August, the energy committee said that the Ministry was not sending its daily reports to the legislature anymore. That led one lawmaker to say that the government’s figures about the electrical sector were no longer reliable, because they could not be verified. The month before, members of the committee said that the country’s infrastructure was too old to reach any of the government’s goals for upping production. Some on the committee have also accused politicians of pressuring the Electricity Ministry into deals with Turkish companies that are incapable of completing their work. Charges such as those are leading to increasing claims that Minister Aftan and other officials are involved in corruption. As a result, there are more and more calls for the Minister to appear before parliament for questioning, but nothing substantive has been done about it. The Iraqi constitution gives the parliament wide ranging powers to oversee and regulate the government. Unfortunately, it has completely failed at this task. Party bosses for example, have blocked ministers from appearing before committees out of fear that if it becomes a regular practice they would have to answer for their performance. Lawmakers can complain all they want about the Electricity Ministry therefore, but it will have little to no affect.

The Iraqi government has consistently said that it would find a solution to the country’s power shortages. In February 2011, Prime Minister Nouri al-Maliki stated that the situation would be solved in just 15 months. That benchmark was only one of many to come and go without being fulfilled. Now, the Electricity Ministry has promised 14,000 megawatts by the middle of 2013, and 20,000 by the end of that year, which would end power shortages. The public has little faith in these announcements, and an increasing number of politicians believe them to be false promises as well. The government is moving ahead with construction of new power plants, and overall production has seen steady increases since 2003. Poor planning, and unrestrained usage however, has continually plagued the effort to resolve this issue. Several Electricity Ministers have been sacked as a result, and there have been two years of protests as well. Its continued failure to match rhetoric with results, is undermining Baghdad’s credibility, and hindering the economy as well since companies can’t operate without a consistent power supply. The authorities are feeling all of this pressure, but the dysfunctions within the government consistently undermine their efforts. It’s likely that Iraq will face years more of shortages as a result.


AK News, “Electricity bills subsidized,” 11/17/11

Ali, Nashoor, “Iraq only producing one third of its electricity needs,” Azzaman, 8/28/12

Aswat al-Iraq, “Electricity minister implicated in 27 offences, MP,” 8/21/12

Brosk, Raman, “Electricity production will reach 20,000 MW by end of next year, says ministry,” AK News, 7/31/12
- “Parliamentary committee warns of exposing politicians who pressurized Electricity Ministry,” AK News, 8/20/12

Al-Hamdani, Karim, “Unpaid electricity bills in Iraq amount to more than half a billion dollars,” Azzaman, 11/15/10

Hassoun, Nasir, “$28 Billion Allegedly Squandered on Electricity Projects in Iraq,” Al-Hayat, 8/2/12

International Crisis Group, “Failing Oversight: Iraq’s Unchecked Government,” 9/26/11

Kami, Aseel, “Iraqi electricity bills jump in power saving move,” Reuters, 6/1/10

Lee, John, “Iraq Exempts Citizens from Electricity & Water Charges,” Iraq Business News, 8/15/12

Rasheed, Ahmed, “Iraq subsidies power after protests over services,” Reuters, 2/12/11

Al-Rikabi, Basem, “Iraq’s power supply still way below domestic demand,” Azzaman, 7/29/12

Al Sayegh, Hadeel, “Iraq pays high price for lack of electricity,” The National, 7/13/12

Shafaq News, “Electricity Ministry announces the loss of 1,250 MW from the national system,” 8/27/12
- “Electricity ministry to install smart volt-ammeters based on prepayment and give energy for 24 hours,” 8/28/12
- “Energy ministry criticizes the electricity ministry,” 8/1/12
- “Parliamentary energy commission promise to increase electricity production unfeasible,” 7/7/12

Special Inspector General for Iraq Reconstruction, “Quarterly Report and Semiannual Report to the United States Congress,” 7/30/12
- “Quarterly Report to the United States Congress,” 4/30/10


gutscheine zum ausdrucken said...

very good comment

Steve Donnelly, AICP said...

Remember that Iraqi's have not been dependent on its centralized electrical system for years. The real systems that people rely on are generators, which they pay for themselves.

The more central power, the more the demand, and the demand for new electrical uses is a virtuous system---the more power available, the more basic modern equipment Iraq's will connect to it. Places like Viet Nam show 10% demand increases EVERY year---prosperity and new equipment create their own demands.

Much easier to decentralize the system into regional power coops--each with its own allocation from the central grids (let them fight over the shares, and let the Ministry focus on supply to the coops), while each coop can begin to develop its own interim payment/financing systems as the emerge. (like "Baby Bells" in the US. Rationalization and consolidation are years away.

Loved the write up on Al Fattah, just one of the many challenges to the central system.

Joel Wing said...

Steve, as with too many things in Iraq, the government is attempting to centralize and control everything. In a state-run economy like Iraq its expected. Kurdistan has been much more successful with something like 20 hrs per day of power, because they have allowed private companies to come in and build and operate their generators. Unfortunately, Baghdad is not open to those types of ideas, although it gets mentioned every now and then.

Steve Donnelly, AICP said...

Theory vs. practice. The more the central government does not deliver electricity, the less important it's role and relevance.

To the extent that the handgun, in some theories, proved a handmaiden to democracy, a generator might be so against a dictatorship: If you have no power to give, you have less power over me....

Having stood atop the fragments of Al Fattah, the collective damage to each of the two bridges was incredible. Happy to send you the pics.

But I remind that it was the Iraqi Ministry of Roads and Bridges (not the US) and Iraqi funds (not US) that got the replacement bridge up and running.