The Yangon Electricity Supply Board does not yet have concrete plans to allow private investment to take an equity stake in the business, though private firms are meeting with the board to look for opportunities.
Some media has reported the board, which is a state-owned enterprise under the Ministry of Electric Power, is planning to allow in private partners as part of its ongoing corporatisation process – which aims to see it run professionally at arms’ length from the ministry. However, officials from the board faxed a letter in response to questions from The Myanmar Times, stating that it will be some time before this happens.
“The Yangon Electricity Supply Board will be the Yangon Electricity Corporation after its corporatisation is finished,” said the letter. “The Yangon Electricity Corporation needs good corporate governance standards to operate on business terms.”
“At the moment there are no plans to invite private investment. It can happen when the Corporation succeeds in business like a private company,” the letter said.
Although the board claims to not have any plans to invite private investment, it has been inviting representatives from local companies to take part in meetings on the corporatisation process.
“We have done planning to transform Yangon Electricity Supply Board into a joint private-public company in the future,” said board secretary U Toe Aung. He added there are about 10 companies working with the board in areas like electricity generation and distribution.
Zeya and Associates is one private company currently working with the board. Its chair U Zeya Thura Mon told The Myanmar Times that the board is currently constrained by its reliance on the state budget.
“It can’t do enough investment to update the aging power transmission and distribution lines in Yangon,” he said.
The corporatisation process is an attempt to run the board professionally, and will create good results, according to U Zeya Thura Mon. He added his firm is discussing whether there are any investment opportunities, as there will be many changes with the corporatisation process.
The electricity price is also likely to increase in the long term, as it must be realistic to cover the price of production, he added.
An official from the Yangon Electricity Supply Board finance department said it purchases power from K60 a kilowatt hour to K450kwh. The board’s monthly income is now about K31 billion (US$30 million) a month after prices were raised earlier this year, and had formerly been about K20 billion.
The board has earned K159 billion from April to August, though only K2.1 billion is profit, after accounting for taxation and other running costs.
Source: MYANMAR TIMES