Biggest Hydropower Station So far
Today, I am so pleased to be able to join with our people to put into official use the 338 MW hydropower station of Russei Jrum Kraom – the biggest hydropower station we ever built so far. We used to put into official use the power station of only dozens of MW power. Today, we have a 338 MW power generation station which, for us, is a big scale of power station. As for China, on their Yangtze River, they built one of tens of thousands of MW. In 2018, we hope to have another hydropower station ready and it will produce up to 400 MW.
I am so happy to see these achievements that we have worked together to make it happen on our land. On 28 December 2010, over four years ago, I came here with the presence of brother Say Phuthang to witness the stage of sealing the dam. Now the station has started to provide us energy as is reported by HE Suy Sem and Mr. Li Qingkui, Chairman of the board of China Huadian Corp Company. I would like to take this opportune moment to express my sincere appreciation to the company for making this marvelous achievement happen on this remote part of our territory. As far as I know there is only 016 telephone coverage. Even from helicopter, it was impossible to communicate for being obstructed by mountains.
Two Financial Sources for GMS
As I thank the company for its effort, I also express my sincere appreciation for the efforts of the Government of the People’s Republic of China who always encourages the Chinese companies to make their investments in the Kingdom of Cambodia. Mr. Li Qingkui has mentioned about the new Chinese policy relating to the economic and sea silk roads of the 21st century. In one of the meetings in Beijing, as is said by Mr. Li, in the framework of APEC summit, regarding the Silk Road, China has declared its commitment of 40 billion USD. The Silk Road is in fact what is called the Silk Road Economic Belt and I have always supported the Chinese commitment for investment as is proclaimed by President Xi Jinping.
In the Bangkok meeting of the Greater Mekong Sub-region (GMS) I also appealed to the meeting, especially to Premier Li Keqiang on issue of using new credit. Before, the GMS depended entirely on the coordination and credit availability through the Asian Development Bank. However, in the new situation, we have two sources of capital that we ought to think of making use for that purpose – the Silk Road Fund and the Asian Infrastructural Investment Bank. I made the point in my speech but also mentioned it verbally.
Though Crisis, PRC’s Commitment Unobstructed
As for investment here, though it was started in time of economic downturn and financial crisis, and it is yet to have reached economic certainty, many countries have applied their strategies of retaining their own capitals. However, of all Chinese investment projects (here in Cambodia) none has had any problem about lacking capital for project implementation. The point has shown that the Chinese company with their investments in either Cambodia or other countries have had their financial backing from the Government of the People’s Republic of China, and most importantly, the Chinese banks.
As far as China’s Cambodian projects are concerned, no project has been delayed or abandoned because of lack of funding in time of crisis. On the contrary, in my dialogues with the Chinese leaders, they have always appealed for the Chinese companies to come invest in Cambodia. In addition to electricity, China has got excellent expertise. In this part of the world, Vietnam or Laos, for instance, which produce lots of electricity, they purchased turbines from China. On top of expertise, PRC also has got real capital. They do not have one in absence of the other.
We have made tremendous efforts to build transmission lines and distribution network for the stations in this area – Russei Jrum Kraom, Atai and Ta Tai. We already put into official use the 120 MW Atai hydropower station. Today we are putting the 338 MW Russei Jrum Kraom hydropower station and in this year we also are going to put the 246 MW Ta Tai hydropower station into official use. I wish to attach here my deepest thank to the Ministry of Mines and Energy, the Electricity Authority and Company of Cambodia for their combined efforts on this work. I also thank the concerned authorities, especially the armed forces and local authority who oversee the security in this area.
We all should learn that this is the achievement of peace that HE Suy Sem just mentioned. We would not be able to accomplish all this if it were in 1998. No previous governments, since the time of the French occupation, could have controlled this area. France had in fact controlled Cambodia for almost 100 years but failed to control this area. From a helicopter, I once told Madame Ambassador of PRC to Cambodia that this area was never controlled by the Royal Government until 1998, when we have made Cambodian territory as whole again.
Since 1970, let us look back in our history, had there been Cambodian control of the area? Before 1970s, this area could be considered insecure area. Thank to the realized peace through the win-win policy, we have the chance to gather our resources and ability for development, such as hydropower station here. Without win-win policy, in absence of peace, we could achieve nothing here. From 1998 onward, we have made this much for the place and it will surely become a tourist destination too as those who are on their ways to Koh Kong would like to pass by and see Russei Jrum Kraom hydropower station. On this note I am grateful to the supports of our people and all involved factions for national reconciliation, which finally led our country to full peace and development today.
Electricity – Household Consumption and More Jobs
I would now inform you about how we go about solving the need for electricity of the people in Koh Kong. I am so grateful to understanding of our people by which the 338 MW hydropower station will contribute to the national and Koh Kong’s progresses. So far the people in Koh Kong, where the Atai, Russei Jrum Kraom and Ta Tai hydropower stations locate, have not used the electricity generated in its territory. Electricity generated from hydropower stations in Koh Kong has gone to serving the need for power in Phnom Penh, Pursat, Kompong Chhnang, Battambang, Banteay Meanjei, Siemreap, Kompong Cham, etc. but the people of Koh Kong themselves. People in Koh Kong are still using electricity that we buy from Thailand.
With HE Keo Ratanak and Ti Narin, we have come up with a plan. We have projected 1000 MW of electric power from our hydropower station. Electricity is not just the power we need anymore but a social and/or economic issue. It may also be an issue in various other factors involved in the development process of the country as the world is now paying greater attention on issue of food and energy security. Cambodia has gone through so many difficult stages. Now the time when we used tree sap or diesel for lighting is behind us. Our people now used electric power generated from hydro or fuel, battery and solar sources.
The generation of 338 MW hydropower electricity provides us the ability not only to resolve the issue of electricity need for household consumption but also the creation of jobs by factories and enterprises in special economic zones for our people and the development of our economy. I hope that the factories, enterprises and/or hotels that benefit from lower price energy will reconsider the adjustment of salary for their workers. Two major points that investors are interested to know is (1) price of electricity and (2) minimum salary. The two points are critical to their decision making. It is with this understanding that we have put into operation, and made known to investors, the mechanism for negotiation on minimum pay for workers and electricity as part of our policy for industrial development.
No Development without Impacts on Environment
After my off-the-cuff comments today the Electricity Authority and Company as well as the Ministry of Industry and Mines will issue a communiqué in relation to electric prices. It is true that in the world there is no development that will not have impact on environment. With growing number of population, one has to resort to enlarging their rice cultivating area. To do so one may have to clear forest. Pressure on environment arises. To generate 338-MW hydropower electricity there needs to have certain size of reservoir in order. We need to put up dam to create reservoir. Some countries have even generated electricity from nuclear power and each time they have problem, unimaginable disaster mark the earth – Chernobyl, etc.
In Vietnam, they also are commencing the project to produce nuclear power. If we talk about pressure on environment, what would we say about countries that pump oil from underground or under the sea floor for daily consumption? The issue here is to measure between economic loss and profit. Take for example in Ji Phat, according to one study, Cambodia has got some 20 billion USD worth of Titanium. I do not authorize the extraction. Leave it in the ground. It will not be depleted there. Leave the matter to younger generation. Hun Sen will not touch it. Why? In order to get to Titanium, thousands or ten of thousands of tree coverage will have to be removed. On top of that it is the area where we have elephant. On another concern, once we dig up for titanium, the sea which is adjacent to the area will also be affected.
Let me also touch on issue of the National Road 52 here. I have instructed to abandon the project to build the NR 52 from Kompong Chhang’s Psar Kraom to Santuk, which costs roughly 200 million USD. The issue here is not because of the amount of money needed for the construction but our uncertain evaluation on impacts on environment. If were to build a road, we would have to level up the soil and that will bear impacts on the Tonle Sap lake and river. We may not know where the fish travelling paths are. We may have a 3800-meters bridge as waterway, but how that will replace the natural waterway of some 60 Km. We have requested to the Chinese side already to withdraw the project and to reserve the requested financial assistance for the construction of dams around the capital of Phnom Penh. Let us leave it for the moment. Let the younger generation make this decision.
Electricity Price for People in Koh Kong
I am sure people in Koh Kong would like to hear about what they will get from their electricity. There is this Zone I of Koh Kong’s districts of Sre Ambel and Botum Sakor, which benefits from transmission line of the Sihanoukville of the Electricity of Cambodia. People in Sre Ambel pay 1400 Riel and in Botum Sakor pay 1600 Riel/KWH. The price is still high. As a solution, the Electricity of Cambodia will provide electricity at a favourable price, for both districts, of 800 Riel/KWH by March 2016 and continue to lower until reaching the planned price. Between now and March 2016, there are 15 months and it is a long time. May I ask that the price comes down to 1000 Riel/KWH from now and March 2016. Is that alright? (The Electricity of Cambodia agreed).
As for Zone II of Koh Kong which consists of the Khemarak Phumin city and Mundul Seima district that consume electricity we imported from Thailand at a retail price for our people of 6,5 Baht or 840 Riel/KWH, the Electricity of Cambodia will provide electricity from the river of Ta Tai, ready in March 2015, at a retail price of 800 Riel/KWH in 2016. The price will be 40 Riel lower than their current price. The concerned authority has reserved some 60 MW for Koh Kong as there would be some industrial development in the future.
For Zone III of Koh Kong, the districts of Koh Kong, Thmar Bang and Botum Sakor, where they still use small diesel engine at a retail price of 3000 and 3900 Riel/KWH in places where the transmission line has yet to reach them. The Electricity of Cambodia will mount the poles and transmission line to wire the low-price electricity from Ta Tai to them. We hope that in early 2016, they will benefit from the 800 Riel/KWH before lowering to the planned price. We have requested for the National Assembly’s approval of a sum of 22 million USD for loan to the Electricity of Cambodia. A member of the National Assembly misconceived it to be Electricity of Cambodia’s operational loss. It is a new sum of money that we loan to Electricity of Cambodia in addition to its capital to speed up mounting transmission lines, which includes those to the districts of Koh Kong, Thmar Bang and Kirisakor.
Price Ranges of Electricity – Industrials, Households and Farming
I would like to take this opportune moment to say something in relation to the prices of electricity. Let me clarify that this issue is not solely relating to the generation of electricity but also to our production base and competition. In 2015, for industries and commercial entities who subscribe electricity from directly sub-stations, they will pay 530 Riel/KWH. They buy in 2015 at 725 Riel/KWH from lines in Phnom Penh, 705 Riel in 2016, 685 Riel in 2017, 675 riel in 2018, 668 Riel in 2019, 660 Riel in 2020. The trend of price is going down. Factories and enterprises should see the benefit from purchasing electricity from the transmission lines in Phnom Penh. As for provinces, in 707 Riel/KWH in 2015; 687 Riel in 2016; 675 Riel in 2017, 670 Riel in 2018, 668 Riel in 2019 and 660 Riel in 2020.
Now I am talking about prices of electricity provided for household consumptions in area where electric transmission line network covers, excluding those provided by the private source of electricity. In 2015, the price will be between 920 and 820 Riel/KWH; 780 Riel in 2016; 770 Riel in 2017; 750 Riel in 2018, 740 Riel in 2019 and 730 Riel in 2020. For areas that electric power is provided by private source of electric generation but using state transmission lines, the price in 2015 has now agreed to 1000 Riel/KWH; 800 Riel in 2016 or 20 Riel more expensive than that provided by the state; 790 Riel in 2017; 770 Riel in 2018; 760 Riel in 2019 and 750 Riel in 2020.
We also have favourable rate for those who live in poor residence and used the electricity for farming in areas covered by the state transmission lines. Those poor households that use not more than 50 KWH/month, they will pay only 610 Riel/KWH in 2015 through to 2020. Those households consume no more than 10 KWH/month will pay 480 Riel/KWH in 2016; 474 Riel in 2017; 462 Riel in 2018; 456 Riel in 2019 and 450 Riel in 2020. Electricity used to pump water in farm between 9pm and 7am will cost 480 Riel/KWH in 2016; 474 Riel in 2017; 462 Riel in 2018; 456 Riel in 2019; 450 Riel in 2020.
Appeal for Electricity by Private Groups and Oil Companies
However, I have two appeals here – (1) let the Electricity Authority, Electricity Company of Cambodia and the Ministry of Industry and Mines work out with those private electricity providers who depend on fuel to jack down their prices as oil prices has lowered. I would also advise the governors of the provinces, most of whom are present here, to assist this effort. They have asked to increase the fuel prices, and now that the fuel prices go down, they seem to have retained their high prices;
(2) May the fuel companies respond positively to the request of the Ministry of Economy and Finance to bring the price of fuel to 3900 Riel/litre. As of today, Caltex and Total have fixated their diesel prices at 4,100 Riel/litre, regular unleaded gasoline 4,250 Riel/litre and 4,450 riel/litre for super unleaded type. Sokimex and Tela have based their diesel prices at 4,000 Riel, 4200 Riel for regular gasoline and 4,400 Riel for super unleaded type. I am of the opinion that they should have run out of stock of fuel stored from the high oil price time. I am seeking their cooperation here to bring the prices down further.
Workers Hired Lodgements to Pay Original Electricity Price
According to one study and as I discussed with HE Keo Ratanak and HE Pa Socheatvong, Mayor of Phnom Penh, we have come to an understanding that there are roughly 30,000 lodgements leased to workers in Phnom Penh and some 150,000 workers are paying for electricity at the prices fixed by their landlords between 850 Riel/KWH and 2500 Riel/KWH, whereas the correct price they should pay is somewhere between 610 Riel/KWH and 820 Riel/KWH, on the condition that their consumption is no more than 50 KWH/month. It has been a practice that people who rent lodgements to others would charge extra. It has an expected side effect to the fact that their incomes are facing with increasing extra expenses.
Aside from that the leasing fees of lodgements are also increasing. I am asking the Electricity Authority and Company of Cambodia and the Ministry of Industry and Mines to work with the Municipality of Phnom Penh to review this issue. They should work out what to do to cope with this situation and they may even have to run a direct line to their lodgements if they need to so that workers can pay the right price of electricity. We must do whatever it takes to help our workers to benefit from the advantage of lower electricity prices in the country. The same measure must be taken for those in the provinces. I am sure concerned institutions of electricity will make a statement later with the press and make sure to note that this is actual thing and not a promise.
Clarification on New Salary
Please allow me to have your understanding on this issue of new salary practice that I said last Monday at the province of Tbong Khmom to go into implementation starting January 2015 – the start of new year. It turn out to be not so. The deadline for commencing the implementation of new salary for the Royal Government employees and the armed forces will be in April – the Khmer New Year. Please allow me to give you some increasing rate. As of April 2015, the lowest rate of salary increment for the Royal Government employees will be 30.9% or from 424,000 Riel/month to 550,000 Riel/moth, whereas for teachers from 550,000 Riel/month to 650,000 Riel/month.
For teachers, their salary increment rate in the last nine months has been 34% and 17.5% by April. Health workers whose earning per month was 550,000 Riel will increase to Riel 650,000. Compared to early 2014, health worker’s salary has increased 47% and from October to now 17.6%. For armed forces, the lowest rank policemen will go from Riel 473,000/month to Riel 640,000 – including also the rice allowance. The lowest rank soldiers will have their salary increased from Riel 355,000 to Riel 533,000, with extra 22 Kg of rice. This is what I have to say in addition to my apology for giving the wrong date for salary increase.
I told HE Aun Porn Monirath, Minister of Economy and Finance, to make sure the Royal Government employees and the armed forces receive their April salary in time for the Khmer New Year. In short, new salary will be implementing in April 2015. I would like to take this opportune moment to express my sincere thanks to the Chinese guests for their presence today which clearly illustrates strong comprehensive partnership between Cambodia and China, from whom I have always mentioned the three types of assistance we are depending on – grant, non-interest loan and investment, one of which we are celebrating its achievement today./.