The Ministry of Electricity and New and Renewable Energy is considering a suggestion from the industry comittee of parliament to include 25% of the value of the fixed installment paid by factories every three months as part of actual consumption bills.
The Ministry of Electricity calculates the fixed installment based on the maximum consumption during a period of three months, multiplied by EGP 50. This value is added to the actual consumption bill of factories on a monthly basis.
Mohamed El-Zeiny, representative of parliament’s industry committee, said that the committee submitted during the past week a memorandum to Minister of Electricity Mohamed Shaker regarding the demands of the Chamber of Metallurgical Industries.
El-Zeiny quoted Shaker saying that the government approves of providing factories with a three-month period to schedule the debts of electricity consumption. “We will respond to parliament regarding adding 25% of the fixed installment to consumption within two weeks,” he added.
Ahmed El-Bayali, member of the board of directors of the Chamber of Metallurgical Industries at the Federation of Industries, said that factories pay EGP 30,000-50,000 monthly as a fixed installment, in addition to the value of actual consumption which does not represent 25% of the value of the fixed installment imposed by the Electricity Ministry.
In an earlier statement to Daily News Egypt, he said that factories are demanding from the energy committee of parliament to ration the fixed installment so it represents a percentage of actual consumption, not the opposite, especially that the value of the fixed installment increases annually.
He said that local councils in the governorate of Qalyubia make foundries pay EGP 450 for each kW in order to cover the costs of support work it has implemented at electricity plants without a real need for them, making their costs a new burden on the back of foundries. The issue was presented to the energy committee and is expected to be discussed during an upcoming meeting.
Mohamed Hanafi, director of the Chamber of Metallurgical Industries, said that in some cases, the fixed installment does not suit consumption. The installment may be EGP 30,000 monthly, while local consumption may not exceed EGP 1,000.
Hanafi explained that the main issue is with the foundries which have contracted on amounts they cannot fully consume.
“Several idle factories are suffering from the accumulation of the fixed installment bills, as factories pay for services they have not obtained in the first place,” he added.
He noted that the average fixed installments of large factories range between EGP 5m and EGP 7m monthly, while the amount is EGP 30,000-40,000 for smaller factories.
He pointed out that the fixed installment of large factories does not exceed 10% of the value of actual monthly consumption. This does not represent an obstacle unless work was halted, but it represents double the actual consumption in smaller factories.
Mohamed Saad El-dein, vice chairperson of the Chamber of Petroleum and Mining of the Federation of Industries, said that the government must contract with factories based on expectations schedules, and they could contract for greater amounts later on, only if needed, in order to avoid paying large amounts of money they cannot bear.
