NewsWhore
11-17-2011, 02:00 PM
According to the Minister of Economy, Planning and Development, Temistocles Montas, next week representatives from the International Monetary Fund (IMF) will meet with their Dominican counterparts to discuss and find a solution for the possible increase in electricity rates, reported to be at least 18%. Montas has said that the rate increase was one of the requirements for the approval of the seventh review of the Stand-by Arrangement that was signed two years ago. The Minister told El Nuevo Diario reporters that the IMF realizes that the rate increase is not possible from one day to the next. He said that the IMF knows that a rate increase would not solve the problems of the electricity sector as so many people steal electricity. A bill in Congress establishes a gradual phasing in of the increase at 1.5% monthly.
Montas told the press he recognizes the fact that part of the problem that has arisen between the DR and the IMF is the fact that there is huge amount of electricity lost between the generation and the consumers, largely due to electricity theft. He said that collection for energy consumed is also a high priority. In addition, the representatives of the Inter American Development Bank (IDB) and the World Bank, Manuel Labrado and Roby Senderowitsch also recommended improvements in the electricity service by solving the problem of a 30% transmission loss due to the poor condition of the power lines. Senderowitsch suggested that if collections were improved, the 18% rate increase might not be necessary.
Local economists have disputed statements by Minister Montas that the IMF is imposing the rate. The economists explain that the IMF requires the country to fulfill the agreement and does not specify how the country can balance its accounts. It would be a decision of the Dominican government to do so by increasing the electricity tariff. Traditionally this has been a simple way to get a windfall of cash. In the DR, power is shut down on the day the payment is due. Other economists have called for the government to instead cut its own wasteful spending, and not penalize the productive sectors and consumers.
More... (http://www.dr1.com/index.html#3)
Montas told the press he recognizes the fact that part of the problem that has arisen between the DR and the IMF is the fact that there is huge amount of electricity lost between the generation and the consumers, largely due to electricity theft. He said that collection for energy consumed is also a high priority. In addition, the representatives of the Inter American Development Bank (IDB) and the World Bank, Manuel Labrado and Roby Senderowitsch also recommended improvements in the electricity service by solving the problem of a 30% transmission loss due to the poor condition of the power lines. Senderowitsch suggested that if collections were improved, the 18% rate increase might not be necessary.
Local economists have disputed statements by Minister Montas that the IMF is imposing the rate. The economists explain that the IMF requires the country to fulfill the agreement and does not specify how the country can balance its accounts. It would be a decision of the Dominican government to do so by increasing the electricity tariff. Traditionally this has been a simple way to get a windfall of cash. In the DR, power is shut down on the day the payment is due. Other economists have called for the government to instead cut its own wasteful spending, and not penalize the productive sectors and consumers.
More... (http://www.dr1.com/index.html#3)