Political parties attack EFL
6 July, 2019, 8:15 am
POLITICAL parties have attacked claims by Energy Fiji Ltd (EFL) CEO Hasmukh Patel that higher electricity prices are needed. In a statement issued this week, National Federation Party leader Professor Biman Prasad said Mr Patel only wanted a price increase to attract buyers for EFL shares.
In a separate statement Fiji Labour Party leader Mahendra Chaudhry said EFL was highly profitable and did not need the increase.
At a meeting in Nadi last month, Mr Patel defended EFL’s bid to increase electricity tariffs by 17.5 per cent.
He said EFL had lost more than $100 million in the past six years because of a decrease in electricity tariffs in 2013.
But Prof Prasad said Mr Patel had been “bragging about profits” in the annual reports of EFL (previously Fiji Electricity Authority) since 2010.
He said that in 2018 EFL had reported a $63.9m profit, and paid a $20m dividend to Government.
He said FEA had made a $60.9m profit in 2017, In 2016, its profit was $59.6m despite Tropical Cyclone Winston.
“Facts don’t lie,” Prof Prasad said.
“Mr Patel needs to explain EFL’s exorbitant profiteering, even strangling consumers, by charging them an extra deposit almost nine years ago, equivalent to two months of consumption of electricity for every account.
“Any hike in tariff will lead to the already unsustainable cost of living rising to unprecedented levels.”
Mr Chaudhry, meanwhile, said EFL had been making annual provision for asset replacement over the years.
“In 2018, the company had $815m in accumulated capital reserves. It is also holding customer security deposits of $97m.
“What is this money being set aside for? It should be used to replace and upgrade its assets. In fact EFL is financially in a very healthy position, due to good administration and prudent and competent management of its finances. It certainly does not need an increase in tariff to pay for its capital works.”
Mr Chaudhry said that EFL had to realise that it was a provider of an essential service.
“Its role is to provide affordable and reliable energy to households and businesses. It must take account of the public interest and the national economy.”
Mr Chaudhry said that EFL had paid a dividend of $29m to Government this year and a further $20m dividend last year.
He said the proposed 17.5 per cent tariff increase was unwarranted.
“As it is the people are going through very hard times. “Businesses are experiencing a worrying downturn.
“Energy costs constitute a large part of business as well as household expenditure.”
Mr Patel had not responded to questions sent to him about the political parties’ statements when this edition went to press yesterday.