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Expert: New medium-term tariff policy will kill industry of Kyrgyzstan

«Industrial enterprises simply do not have such income to pay for electricity at the new tariffs,» Doctor of Economics Asylbek Ayupov told 24.kg news agency, commenting on the new medium-term tariff policy.

According to him, tariffs increase is only a plan, but there is also a fact. Many enterprises simply won’t be able to pay the higher electricity bills, because they don’t have that kind of income.

The country’s economy is currently not in the best situation. Statistics show GDP growth, but this is mainly due to the mining sector.

There is no growth in the «vital» sector, which produces any specific products. If the tariffs are raised, they will not be able to pay, electricity will be cut off. What to do in this case? Entrepreneurs will simply turn off machines and equipment. Production will stop. If the economy is working at a quarter of its strength, many enterprises are idle, then where can they get the funds. Supply of components is practically at zero, there are no supplies due to the pandemic. This is also a big problem," Asylbek Ayupov believes.

He also drew attention to the fact that most of the electricity is now consumed by the population and the utilities sector. Therefore, if tariffs are to be raised, then for all categories at the same time. Everyone should be on an equal footing.

«I believe that thinking people also work in our Cabinet of Ministers, they will consider the consequences of the increase in tariffs for the industry,» he said.

New medium-term tariff policy is already undergoing the approval procedure in the Cabinet of Ministers. The document was studied by ministries and departments and they gave their proposals. It is at the stage of approval in the Cabinet’s Office now.

The draft medium-term tariff policy proposes to leave the tariffs for the population unchanged, but significantly increase them for the industrial sector. It is envisaged to increase the basic tariffs for non-residential consumers from 2.24 to 2.52 soms per kilowatt-hour, that is, by 12.5 percent, as well as to apply multiplying co-efficient of 1.3 and 2 for certain categories of consumers.

Application of multiplying co-efficient to tariffs is contrary to the legislation of the Kyrgyz Republic.

Experts are confident that such an increase in the tariffs will not solve the strategic goals, that is, it will not reduce electricity consumption and water consumption during the winter season, and will not provide significant additional income.

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