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[size=30]Privatization..a last chance to save electricity in Iraq with a tax that provides sustainability and 10 billion dollars to the state treasury annually
2022-01-07
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[rtl]Yes Iraq: Baghdad[/rtl]
[rtl]The electricity file and the ministry’s need for money in exchange for the lack of collection are still the subject of the discussion and the need to search for solutions, as collection amounts to only 8%, amid the ministry’s annual expenses estimated at more than 10 billion dollars, while proposals appear on the need to privatize the electricity sector in Iraq for several reasons. And the advantages that privatization will provide.[/rtl]
A spokesman for the Ministry of Electricity, Ahmed Al-Abadi, said earlier, “The ministry did not receive a single dollar of the value of the investment budget, which is supposed to have been approved in favor of 2021,” noting that “there is an obligation towards investors and some government departments that the ministry dealt with on credit and on it until We are working with the electricity file, which is supposed to prepare the ingredients.”
He cautioned, that “if the financial revenues are delayed, the ministry’s plan will falter, especially since there is a period of winter loads and there is a period of summer loads and peaks, and therefore it is not possible to wait for the budget to be approved and the ministry to give its money during the fifth or fourth month, but rather it is assumed that funding is currently obtained to prepare for the next summer.”
He explained, "Allocations alone do not suffice, but there must be releases and financial liquidity for the benefit of the electricity sector."
The allocations of the Ministry of Electricity from the budget amount to about 10 billion dollars, and amounted in 2021, 16 trillion dinars, or more than 10 billion dollars, as this money is burned annually, which represents about 12% of Iraq’s budget, which amounted to about 129 trillion dinars, is burned to provide electricity Without a financial return that guarantees the ministry's sustainability and its need for continuous liquidity, the collection is only 8%.
This was confirmed by Finance Minister Ali Allawi in press statements when he indicated that "the state's spending is large, but in return it needs additional resources, for example, not paying electricity bills by citizens costs the state 15 trillion dinars annually."
In turn, the Ministry of Electricity owns debts owed by ministries and state institutions amounting to 3 trillion dinars, which represents more than 25% of its annual budget.
Mortada Al-Azzawi, who is interested in economic affairs, sees the necessity of privatizing the electricity sector for 7 different reasons.
Al-Azzawi pointed out that privatization “provides sufficient funds to sustain the electrical sector and the national grid and achieve 24-hour processing, in addition to providing the correct tax, which will represent a signal price for the consumer in order to reduce consumption and consequently decrease aggregate demand, control annual growth and reduce burdens on the transmission and distribution networks.
And he indicated that "the closer the collection price is to the cost price, the more the private sector's interest in investing in the electrical sector increases, in addition to the real social justice that is available, whereby the poor are supported and part of their bill is paid, while the rich and the affluent pay the price of each kilowatt-hour." He consumes it at work or at home.
He stressed that privatization provides the possibility of government support for the electricity bill for the 3 hot summer months, and significantly reduces pollution, noise and high temperatures in cities due to private generators.
In addition to that, according to Al-Azzawi, privatization and the collection it achieves will lead to the liberation of trillions of dinars in the general budget, which are crippled annually by electricity and spending it to develop other infrastructure such as hospitals, roads, bridges and schools and support agriculture and industry, and thus provide job opportunities for thousands of the poor unemployed “.
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