Al-Mansour and Al-Mamoun First.. The Council of Ministers Approves the Implementation of “Electricit

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[size=52]Al-Mansour and Al-Mamoun First.. The Council of Ministers Approves the Implementation of “Electricity Privatization” in Baghdad 2024-08-15[/size]

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2024-08-15
For many years, Iraqis have dreamed of continuous hours of electricity supply, but this dream seems to still be out of reach despite the spending of billions of dollars and the launch of hundreds of projects by successive governments to improve the electricity situation.[/size]
[size=45]In a move that could change the face of the electricity sector in the Iraqi capital, the Baghdad Provincial Council announced on Thursday its intention to gradually privatize the electricity sector in all areas of the capital, with the aim of ending the issue of electric generators by the end of 2024.[/size]
[size=45]The “Electricity Privatization” project is one of the projects that the government of former Iraqi Prime Minister Haider al-Abadi (2014-2018) began, and was applied to residential neighborhoods in the capital, Baghdad. While privatization was successful in those areas compared to what “private generators” provide to citizens, the project faced political and popular criticism under various pretexts, until its expansion in the rest of Baghdad and other governorates stopped.[/size]
[size=45]According to the official newspaper “Al-Sabah”, the head of the Oil and Gas Committee in the provincial council, Safaa Al-Mashhadani, said that “his council obtained the approval of the Council of Ministers to implement the electricity privatization experiment in the Mansour area and then the Al-Mamoun district, to then move to implement it in all areas of the capital successively,” indicating that “the council seeks to end the generators file by the end of this year 2024.”[/size]
[size=45]He pointed out that “the council had previously voted to set the price of generators for the current months of August and next September at 8,000 dinars for the regular line, and 12,000 dinars for the gold line. However, the council’s local field teams monitored 128 violations of these instructions, even though most generator owners receive subsidized monthly fuel quotas.”[/size]
[size=45]At the same time, he stressed that "violators will be subject to strict penalties, in addition to stopping the kerosene share and removing the generator and replacing it with a new one."[/size]
[size=45]The provincial council voted to set the generator price for the months of August and September at 8,000 dinars for the regular line and 12,000 dinars for the gold line. However, the council’s field teams have monitored 128 violations of these instructions, at a time when the majority of generator owners receive subsidized fuel quotas.[/size]
[size=45]Some experts believe that privatizing electricity may be the final solution to address the electricity crises in Baghdad, while others believe that this step may reproduce the same problems in a different way. The previous experience with privatizing other sectors was not always successful, and privatizing electricity may be a new area of ​​challenges, especially in light of the current economic situation.[/size]
[size=45]Privatization is a modern economic term that emerged from the economic developments that occurred in the world, and is known as: “transferring the ownership of public state institutions to the private sector.” However, developing countries view privatization with suspicion and doubt, as an economic method imposed by political and economic forces, as the state provided, through its public authority, facilities and ministries that are fully owned by it, all services, including: electricity, water, health, education, communications, mail, roads and bridges, and the establishment of the country’s infrastructure.[/size]
[size=45]Iraqis have resorted to electric generators for about three decades to secure additional hours of electricity, as the only alternative to cover the growing deficit in equipment, after the destruction of infrastructure and energy networks following the Second Gulf War, and with the aging of hydroelectric stations, in addition to population growth and the expansion in the use of electrical appliances, most notably air conditioners.[/size]
[size=45]Successive governments have failed to address the problem despite the establishment of new production plants. The deficit has continued as a result of the doubling of consumption, the failure of some projects, and the deterioration of transportation networks, forcing residents and business owners to use private generators to cover the shortfall.[/size]
[size=45]However, the exhaust fumes of these generators contribute significantly to environmental pollution and threaten the health of residents in nearby locations, according to specialists, especially since the high prices of diesel are pushing some generator owners to use black oil, which doubles the rate of pollution and thus health risks.[/size]
[size=45]In addition to the consumption of large quantities of water to cool the generator engines, not to mention the oils they emit, in addition to the dangers resulting from millions of metres of random electrical connections between generating stations, homes and shops.[/size]
[size=45]With 6 million and 700 thousand subscribers to private generator lines, according to official figures, each subscriber paying only 30 thousand dinars per month - which is the minimum amount for any subscription - means that the amounts paid to generators exceed 200 billion dinars per month.[/size]
[size=45]In any case, the statistics on citizens’ recorded expenditures on electricity remain an indicator that the largest share of electricity sales revenues in Iraq go to private generators instead of the Ministry of Electricity. The price of one ampere of private generators whose fuel is subsidized by the state is 10,000 dinars ($7.60) for a regular subscription (for a limited number of hours per day) and 15-25 thousand dinars ($11.45 to $19.08) for the so-called golden ampere (whose subscribers enjoy continuous electricity for 24 hours).[/size]
[size=45]In a press statement by the Undersecretary of the Ministry of Planning for Technical Affairs, Maher Hammad Johan, made in 2023, he indicated that the government’s collection of electricity fees only provides 6% of what the state spends annually on electricity, justifying the Ministry of Electricity’s lack of revenues that would enable it to improve energy services.[/size]
[size=45]In the same context, a report by the International Energy Agency indicates that Iraq's production capacity of electrical energy amounts to about 32 thousand megawatts, but it is only able to generate half of it due to its inefficient transmission network. It is also estimated that Iraq needs 40 thousand megawatts of energy to secure its needs, excluding industrial ones, while it ranks fifth in the Arab world and 50th globally out of 211 countries listed in the table as the largest consumers of electricity in the world, according to the American magazine CEO WORLD.[/size]
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