Thursday, January 28, 2016

Iraq privatizing electrical tariff collection

The Iraqi government has officially begun the privatization of electrical tariff collection this week. The ministry of electricity reported today that a tariff collection in a handful of residential districts in Baghdad has been handed over to private companies.

There's a lot of money there. The ministry says there's about $2.5 billion worth of unpaid bills. The private companies will not be in charge of collecting on those old unpaid bills, though. Instead, the new effort will focus on collecting current and future bills.

The Kurdish Regional Government is considering a similar plan. Earlier this month, the deputy PM, Qubad Talabani, said the KRG was looking into monetizing parts of the power sector, namely bill collection.

Both plans by the federal and regional authorities will be hard to implement. Perhaps the KRG faces a relatively tougher challenge because a) people have less money in Kurdistan because the KRG hasn't been able to pay salaries, and b) Power supplies in parts of Kurdistan have seen, relatively speaking, a sharper decline in recent months.

That's not to say the federal authorities will be hugely successful. They will have an uphill, likely losing battle trying to expand tariff collection outside Baghdad to the provinces. 

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