25-04-07

Iraq must lure between $ 2 bn and $ 2.5 bn per year in international aid and investment if it is to rebuild its devastated power sector, the country’s electricity minister said. The minister, Karim Hasan, was in London to enlist the help of energy companies including BP. Power cuts are a daily occurrence, especially in the capital Baghdad, as a result of nearly three decades of war damage, poor maintenance because of sanctions and due to sabotage.
“We rebuild and they destroy every day,” Hasan said, referring to the sabotage attacks.

He said he was seeking to protect the country’s power plants with security forces, including around 7,000 “power police,” but added: “I can’t secure the power transmission.”
“Many people have died because of the lack of electricity. Most of the hospitals are not working because of a shortage of electricity,” he told. Oil refineries and oil production have also been affected by unreliable electricity supplies. Iraq’s oil output is stuck at around two mm bpd, compared with the nearly 3 mm bpd just before the US-led invasion began in March 2003.

To try to improve power generation, a 10-year plan was agreed in 2006, with the support of the international community, to add about 2,000 MW to current generating capacity of around 5,000 MW. Funding will come from $ 2 bn per year of government money, but the overall cost will be around $ 4 bn to $ 4.5 bn, leaving a gap of $ 2 bn to $ 2.5 bn, Hasan said.
“We urge donors to fulfil the commitments they made at the Madrid conference (on reconstruction in Iraq),” Hasan said. “We also need to ask the power industries to contribute.”

In another development, long petrol queues were once among the most common sights on Baghdad’s busy streets, but the snaking lines of cars waiting to refuel have disappeared in the past month following a 60 % price hike. Queues outside gas stations used to stretch for kilometres.
“Months ago I would stop my car near the petrol station at dawn just to fill up by midday. Now things are much better. I can do so within minutes,” said shopkeeper Ali Naem.

Iraq is still a long way from reviving its shattered oil sector and fully tapping the world’s third largest oil reserves. But the government and officials from the northern Kurdistan region will meet to discuss a draft oil law that could at least set the stage for a revival of foreign investment in the industry -- if Iraq’s parlous security situation improves. Many Baghdadis say the demise of long fuel lines is a mixed blessing because it came on the back of a March 15 price hike to 400 Iraqi dinars (31 cents) a litre, from 250 dinars.
“We feel better when we enter the petrol station, there’s no jam and no long lines, which could kill your whole day two months ago,” Akram Hameed, 35, told.

But the low-paid civil servant says it now it costs so much -- 20,000 dinars -- to fill his car, he usually catches the bus. In 2005, a litre of heavily subsidised fuel cost only 20 dinars. Even the new price is low by world standards. With its refineries idle after a decade of sanctions and years of violence, Iraq has shipped its oil offshore, mainly to Iran, Kuwait and Turkey, since 2003.
The government brings the refined fuel back and paid heavy subsidies -- $ 6 bn in 2005 and $ 2.5 bn last year, according to an oil ministry official -- to keep prices low. But subsidies have been cut under rules set out by the International Monetary Fund for Iraq to reform its economy.

Adel Abdul Ameer, owner of the al-Sadoun petrol station in central Baghdad, said it was good to be rid of the long queues but many people no longer filled their tanks completely.
“They come to the station and ask the worker to fill their car with a certain amount so they can pay for it. Before, no one would even think of that,” Ameer said.



Source: www.arabtimesonline.com