Why Hun Sen can’t keep the lights on

Cambodian leader had promised to reduce power rates to encourage business investment but has failed even to keep electricity flowing in the blacked out national capital

Cambodia has been gripped by daily blackouts in recent weeks, leaving many parts of the capital Phnom Penh without power for most of the day. As temperatures spike during the region’s hot season, heated questions are rising about why the government can’t seem to keep the lights on.

Prime Minister Hun Sen has blamed the blackouts on a severe drought that has stifled the operations of hydropower dams, which supply about half of the country’s electricity needs.

Last month the Ministry of Environment advised farmers not to plant their next rice crop because of the drought, causing some to resort to eating lotus roots to survive, according to local reports.

But the economic impact of the blackouts will be most acutely felt in the national capital, home to the country’s most profitable industries. There is not yet any concrete official estimate on the rising costs of the daily power cuts on the economy.

Kimlong Chheng, director of the Center for Governance, Innovation and Democracy at the Asian Vision Institute, a local think-tank, says that economist costs “depends on the frequency and duration of power cuts.”

“It is hard to say exactly without having hard evidence. Possibly, an estimated 40-50% of factories have been affected, but only about 20 to 30% of their production processes might have been damaged,” he estimates.

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Ou Virak, president of the Future Forum, another local think tank, reckons that the effect on the economy could “be in the tens of millions of dollars.” He adds, however, that a business sector friend estimates the blackouts could cost the economy hundreds of millions of dollars if they last until June.

In mid-March, the government estimated that 400 megawatts of energy were needed to make up for the shortfall caused by depleted hydropower dams, or roughly one-sixth of all the electricity Cambodia consumed last year.

So far only a quarter of this power gap has been purchased from neighboring Laos and Thailand. Vietnam, meanwhile, has declined to sell Cambodia any more power because it, too, is facing energy reductions in its southern provinces.

On April 2, the government agreed to terms on a three year lease of a vessel from Turkey that can generate 200 megawatts of energy, but it is not yet known when the floating facility will be operational.

The hardship, depending on how long it lasts, could have implications for stability. Electricity generator vendors have dramatically raised prices in recent weeks, sparking a heated response on social media.

Government spokesman Phay Siphan has asked people to “keep faithful behavior toward[s] each other with a culture of solidarity for Cambodian people, especially when it comes to hard times with electricity shortages.”

But clearly not everyone is pulling together, exposing the already severe divide between rich and poor.

The commanding towers of the capital’s only licensed casino, NagaWorld, which saw more money pass through its VIP rooms last year than the nation’s entire gross domestic product (GDP), are glaringly illuminated day and night.

Phnom Penh’s poorest neighborhoods, including those on the city’s hard-scrabble outskirts, are being hit the hardest by the power cuts, with some areas apparently receiving electricity for only a couple of hours per day.

Full article available at: https://www.asiatimes.com/2019/04/article/why-hun-sen-cant-keep-the-lights-on/