Electrical blackouts create large financial losses [Archives:2008/1217/Reportage]

December 18 2008

Mahmoud Assamie
Because of the increasing demand for electricity compared to limited supply, electricity blackouts have increased around the country. The blackouts are used to balance electricity distribution, especially in crowded towns and during peak hours in the evening.

A daily power suspension of at least one hour during the daytime has been an issue that many Yemenis have grown accustomed to. Usually housewives and employees dependant on electricity for their work are the ones who notice the blackouts during the day. Despite the fact that these blackouts waste time and productivity, usually housewives turn to other manual activities, and many companies have created an alternative system through installing power generators.

Not all companies are so lucky. Mohammad Azari, a barber in At Tahrir area, explains how this issue has affected his business. “When our customers come to the shop to get a haircut and see no electricity, they leave the shop. Some customers accept getting their haircut by scissors when there is no electricity, but others want only an electric razor for their haircut.”

Small vocational shop owners, such as those working in the welding, carpentry, and mechanical industry, are the ones affected the most by the repeated blackouts.

Abdurrahman Othman, owner of a carpentry workshop in As Siteen Street, states that he faces many problems because of power blackouts. “The daily blackouts in this area occur three times a day, with a total loss of five working hours per day. I have 20 workers and we depend mainly on machines and electric equipments in our work. When the electricity is off, all work is completely halted,” he says.

He reveals that he loses a lot of money as a result of such losses in production. “I lose YR 25,000 every day because of lost working hours and paying for electric violations for operating machines after 5 pm, because there are fines imposed on us by electric corporations if we operate machines after this time.”

Abdullah Aydh, owner of a workshop for cutting and shaping stones in As Siteen area, says that “we face great problems because of repeated electrical blackouts. Sometimes we lose our customers because we could not honor our commitments. In addition, I have four artificers with daily wages of YR 2000 each, and lost working hours due to these blackouts that generally last three hours a day cause me other losses.”

Ahmad al-Hazwarah, owner of some aluminum workshops in the Bier Ashaef area, has several problems because of the blackouts in this area, which range from 2 to 4 times daily, averaging three hours in lost production time. “Electricity is the backbone of the work in aluminum workshops. I lose YR 15,000 every day because of lost working hours, I face financial fines because of delays in submitting the work on time, and face problems due to a lower rate in production.”

Damage to electrical appliances

Besides losing customers and valuable time, owners of middle-sized projects complain that the frequent blackouts damage machines and electrical gadgets.

“Electric blackouts destroyed my machine,” said Aydh. “One time, when the electricity came back suddenly with a strong power surge, it crippled the dynamo of the stonecutting machine. I paid YR 60,000 to repair it.”

Abdullah Hasan, owner of a carpentry workshop in the Maeen Area, says that the electricity blackouts caused his machines to be destroyed several times. “Sudden blackouts led to destroying my machines' dynamos. This problem happened in my workshop nearly ten times.”

Othman agrees with Aydh that the cost of repairing the crippled machine is nearly YR 60,000. “The electricity blackouts have crippled two machines in my workshops. Each machine cost me nearly 60,000 to repair,” he says.

It also happens with domestic appliances. Derhim Assufiani, government employee, lives in the Al Hasaba area. He says the repeated blackouts are destroying his refrigerator and washing machine. “The average number of daily blackouts in the area is two to three times, lasting an hour each time. When the electricity comes back suddenly after the blackout, it comes with a higher electrical output rate, causing damage to machines that have been left on. I had to repair my refrigerator several times because of these electric problems,” Assufiani explained.

Not only is this an individual problem, the aggregation of the productivity loss impacts the national economy.

“Of course, the electricity shortage in Yemen affects the national economy and does not encourage investors to invest in the country. Imagine that the electricity cuts off in a poultry plant in a critical time during egg breeding. It will destroy all the eggs in the plant, causing great losses to the plant's owner,” says Assufiani.

Power cuts also frustrate younger people who want start a vocational business. Assufiani states that “not only do electrical blackouts discourage potential investors in Yemen but they also pose great challenges to young people looking to start a new business.”

Reasons behind the problem

According to the Ministry of Electricity and Energy, Yemen's electric system suffers from a weak generating output due to old stations and the deterioration of most distribution networks. Yet the biggest problem is the increased demand for electricity as the government faces great difficulties in establishing new power generating stations.

Yemen depends on a few power plants providing 1,200 megawatts per hour to supply the needs of only 57 percent of the population, which is increasing annually by a drastic three percent rate.

The Ministry admits that the country currently needs a power supply of at least 3,000 megawatts per hour.

Financial reports of the Yemeni General Corporation of Electricity (YGCE), which is affiliated with the Ministry of Electricity, unearthed that there is a lot of money owed to the corporation from Yemeni businessmen, influential figures, and government offices that simply refuse to pay the electricity bill. Until September this year, money owed to the corporation has exceeded 22 billion Yemeni Riyals. Only 37 percent is owed by the government to the corporation; the rest of the debt comes from the private sector and individuals.

The corporation is negotiating with the cabinet to establish laws related to suing the defaulters, which would give the corporation legal authority to persecute the violators.

Simultaneously, the corporation is in debt to the government of 3.9 billion YR for diesel used to fuel the power stations which provide the country's power supply. It also owes around 1.6 billion YR for spare parts and 550 million YR for lubricating oils.

Moreover, the corporation explained last month that since January 2008 it has lost more than eight billion Yemeni Riyals because of leaking power in the network. The loss is estimated at 27 percent of the network's power supply, a one percent increase from last year. The corporation's technical staff is confused by the sudden increase and is currently looking into the reasons behind this loss, which is mainly from Sana'a city at 440 gigawatts per hour.

“This loss from Sana'a city alone would have supplied two or even three governorates with electricity,” stated the corporation's press release.

Government efforts

Using natural gas as an alternative for fueling electrical power stations is a good strategy, especially considering that Yemen is relatively rich in this natural resource. To this effect, the government is currently constructing two large electricity stations fueled by natural gas. The first one is Mareb Gas Station, with an output of 341megawatts per hour at a cost of US $268 million. Funding was supplied by the Yemeni government and the Arab Development Fund.

On October 18th, the Ministry of Electricity and Energy launched experimental tests on the station, which proved a satisfactory performance of 96 percent. The station is due to work full time in the first quarter of next year and will supply at least three governorates.

The second station also operating on natural gas is Ma'bar Gas Station in Dhamar. The government has finished the technical, environmental, and profit studies of the Ma'bar Gas Station Project, which is expected to provide an output of 400 megawatts per hour. This station is still under construction and may not be operational until the end of next year.

To cover the current electrical deficiency, at present the government is purchasing electric power from neighboring countries. With the establishment of the two new power plants, the individual's cost for power supply would be reduced from YR 40 to only four YR. This will also cut costs paid by the government for diesel used to generate energy in the electrical plants today.

Last November, while launching the Gas Giant Project in Balhaf area, Shabwa governorate, President Ali Abdullah Saleh announced the construction of four electric stations powered by natural gas.

Specialists in the YGCE affirmed that when the Mareb Gas Station will be operating, Yemen will enter the “no electrical blackouts stage” after years of suffering from what has been popularly called power suffocation.