Tajikistan raises electricity rates

DUSHANBE, Tajikistan– Beginning January 1, electricity rates in Tajikistan increased 20 percent. After the value-added tax, every kWh costs 0.09 som (US $0.02). Previously, the rate had been 0.075 som (US $0.017).

Gurgak Mirzoyev, 76 of Dushanbe, learned of the new rate increase from the city electric network’s metre man.

“I used almost 40 som (US $9). This is from December 17, when they installed new metres. They whirl around so much. You know, I do not even have a refrigerator at home, not to mention other luxuries. With the new rate, I will probably have to pay my whole pension”, said Mirzoyev.

Mirzoyev lives alone. He receives a pension of 77 som (US $17.60 USD), 17 som above the minimum pension of 60 som. The first thing he does when he receives his pension is pay the electric bill.

“I have been on a pension since ’94. Then, they set the entire amount of the pension at 24,000 wooden rubles”, he said, referring to the then-worthless currency. “Whether you worked a day or 40 years, they made it the same for everyone. Now, with the conversion to the new money, I come out with so little. You know, I worked as a paramedic for 45 years. I would run into the mountains and treat patients”.

Rashid Gulov, head engineer at Tajikistan’s state energy holding company Barki Tochik, told Central Asia Online, “Presently, payment collection for electrical consumption amounts to 80 to 85 percent (of actual usage), with businesses being at around 95 percent”.

The most persistent non-payers are mostly wealthy people.

“Basically, those who really use a lot do not pay. In order to heat a two-storey house or heat a large swimming pool, you need enough electricity for an entire city block. But poor people are trying to pay it all right away”, economist Khojimukhammad Umarov told Central Asia Online.

In Tajikistan, electrical bills are collected door-to-door.

“Such a medieval way of collecting payments leads to big debts. A metre man will come to a rich house, receive a bribe and not even check the metre, but he will still fine a poor person for (having) an extra outlet”, Umarov alleged.

Electricity rates are set to increase again in six months. The International Monetary Fund’s (IMF) and the World Bank’s (WB) recommended that Tajikistan charge 0.13 som (US $0.03) to provide Barki Tochik sufficient revenue to cover costs and eliminate government subsidies.

“I have always been against the rate increase on the domestic market like the IMF and WB recommended. … (They) think that with a rate increase the energy industry will be more attractive to investors. As you can see, no one is rushing to invest funds here”, Umarov said.

His view is that Tajikistan will be more attractive to foreign investors if rates stay low, especially for industry. Gulov said Barki Tochik is close to become self-sufficient. “In June of this year, it is most likely that after the next increase the rates on average will be 13 dirams in the country. Then Barki Tochik will be a self-supporting structure”, said Gulov.

One bone of contention for Umarov are rates charged for industry, especially the Tajik Aluminium Company (TALCO), the country’s primary electricity consumer, and for irrigation pumping stations .

TALCO consumes up to 20m kWh daily. On January 1, the aluminium company began paying 0.082 som ($0.018 USD) per kWh, up from 0.0515 som. The rates for pumping stations were set at 0.057 som ($0.013 USD), up from 0.0364 som. The cost of electricity for other industrial and nonindustrial consumers is now 0.213 som ($0.048 USD) per kWh, up from 0.1368 som.

“TALCO contributes nothing to the development of Tajikistan’s economy. With an average tax burden of 35 percent, the company should be paying about US $350 million into the state budget, but it transfers over only $60 to $70 million. The remainder goes out of the country”, said Umarov.

“They have already collected money from us for the construction of Rogun GES (hydroelectric station). Now, the rates, too, have increased”, said Gulbakhor Tabarova, 40, in outrage. “I think our authorities are losing the ability to respect limits. And according to my calculations, we do not need $600m for Rogun now. They say that these funds are necessary to purchase two turbines, but the turbines will not be installed for another five or even ten years. The people’s money will most likely go to other projects”, said Umarov. He would not specify which projects.

In an effort to cut electricity usage, Tajikistan imposed a ban on the import of incandescent bulbs last August, and later banned their sale.

“The population is paying less (for electricity) than before, since they began to use energy-saving bulbs more”, Gulov said.

According to his data, over the past six months, 8.1m energy-saving bulbs were distributed to the population, resulting in 5.2m fewer kWh being used on lighting daily. This, he said, is equivalent to the daily energy production of the Sangtudin GES-1.

But Tarabova and Mirsoyev see things differently.

“Each energy-saving bulb costs 40 to 45 som (US $9-10) on the market, but simple bulbs cost only 2 som (US $0.40). (The new ones) constantly burn out. What kind of savings is this ?”, Tarabova asked.

“They brought three bulbs to a poor, lonely old man. They already burned out. I screwed in the old ones out of my own reserves”, Mirsoyev said.