BASRAH'S ELECTRICITY SUPPLY DECLINES BY ONE-THIRD

C O N F I D E N T I A L BASRAH 000141

SIPDIS

SIPDIS

E.O. 12958: DECL: 8/30/2016
TAGS: PGOV ECON ENRG EINV IZ
SUBJECT: BASRAH'S ELECTRICITY SUPPLY DECLINES BY ONE-THIRD

REF: BASRAH 88

CLASSIFIED BY: Ken Gross, Regional Coordinator, REO Basrah,
Department of State.
REASON: 1.4 (b)


1. (C) Summary. The head of the Electric Committee of the
Basrah Provincial Council, Ghazy Smari Jaafar told poloff on
August 24 that the electricity supply has fallen from three
hours on, three hours off to two hours on, four hours off in
recent weeks. He pointed to soaring August temperatures for the
reason for the decline, which has driven up demand for power to
run air conditioners. In order to address Basrah's long-term
energy shortfalls, the councilman stated that, more than
anything else, the Basrah government needs to gain control over
revenues from its oil resources. End Summary.


2. (C) In an August 24 meeting Basrah Provincial Council's
Electric Committee chief, Ghazy Smari, told poloff that
electricity supply has dipped by a third in recent weeks with
power being supplied two hours on, four hours off instead of the
three hours on, three hours off that was available earlier in
the summer. Ghazy said the reason for the decline is the high
August temperatures (with daily temperatures well above 120
degrees Fahrenheit) and the corresponding increased demand for
power to run air conditioners (see reftel). He predicted that
as temperatures fall in September, power supplies would return
to three hours on, three hours off.


3. (C) Ghazy informed poloff that Basrah province needs 1,150
megawatts (MW) a day to satisfy its demand, but only generates
840 MWs on the rare optimal day. He reported that about
one-third of the production is sent northward to feed the
national power grid, leaving Basrah with about 600 MWs a day,
meeting only half of its needs. The councilman gave poloff a
copy of the provincial electricity development strategy through
2009 that lays out plans to increase gradually electricity
generation to 1,290 MWs, provided that a $1 billion power
strategy is implemented. According to the document, Basrah
would still have to cope with a 460 MW daily shortfall in its
electricity needs even if the strategy is fully realized.


4. (C) Ghazy said his biggest concern was the question of
funding the power upgrade strategy. He said the Ministry of
Electricity in Baghdad has allocated only enough budgetary
resources to keep the wheezing, antiquated power system
functioning, with the exception being a one-time $30 million
grant in May. He added that money is being spent to buy spare
parts for the outdated power system and to construct five
substations to convert voltage and transmit power from the
high-tension wires to several Basrah neighborhoods.


5. (C) Ghazy declared that the creation of a federal system of
government offered Basrah its best hope for solving continuing
energy shortfalls. He complained that Baghdad takes all the
revenues from Basrah's oil exports, which are approaching two
million barrels a day. He asserted that if Basrah authorities
could control even a fraction of the province's oil wealth, they
would have enough money to support vital developmental plans.
Ghazy did praise the national government for passing a foreign
investment law that could attract foreign companies interested
in building Iraq's electricity infrastructure, but added that
security concerns still need to be addressed.


6. (C) Comment. Councilman Ghazy 's detailed descriptions of
Basrah's energy shortages suggest that the electricity issue
could figure prominently in the provincial elections expected in
the first half of 2007. Middle class Basrah citizens who earn
in the neighborhood of $300 a month report that they spend
nearly half their income on fuel for private power generators
needed to survive the roasting summer heat. They have told
poloff that lack of electricity is the greatest source of public
discontent in Basrah. End Comment.

GROSS