The Art of Running an Electricity Company

male_dense.jpgMale, the capital of Maldives has one of the highest densities of any city in the world; some 80,000 people live on an area slightly larger than 1 square mile.

In June 2005, newspapers
reported the following
:


State Electric Company or STELCO day before yesterday announced that it would reduce electricity charges during July. The company did not say by how much it will reduce fees but STELCO’s managing director Abdul Shakoor hinted that the price may reduce from 20 to 30 percent when he said that the changes would be made possible with the use of intermediate oil. About 60 percent of STELCO’s expenditures go to fuel, according to him. The change of electricity prices will not only be brought to the capital Male where around 100,000 people or about a third of population reside at any given time, but also in outer island communities.

Just recently newspapers reported the following:

State Electric Company (STELCO) has said that they are trying to raise the price of electricity to overcome the losses caused to the company.

Speaking at a press conference on Wednesday, Managing Director of the company Abdul Shukoor said that comparing the price of oil in the market and the price of electricity, the company will have a loss of Rf 50 million per year. He said that Rf 100 million is also not enough and that about Rf 140 million is required.

“For the coming year also subsidy Rf 50 million will be required. Otherwise we cannot manage,” Shukoor said

Well in three months if there is such a reversal of fortunes of a government owned company, it is left to one’s imagination what could happen to the resources of the state. Maybe Lynne Kiesling should make a visit to the Maldives to see how electricity companies are run in this part of the world.

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This page contains a single entry by Paul published on October 27, 2005 11:30 AM.

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