Ref: 3/2010

 

The
Palestinian Centre for Human Rights (PCHR) is deeply concerned over continued
electrical outage in wide areas across the Gaza Strip for long hours. This outage is the result of reduction in the
capacity of Gaza Power Plant to less than the half and the increase in deficit
of power available in the Gaza Strip to more than 40% of Gaza’s real needs of
power. PCHR expresses its grave concern
over the catastrophic impacts that may result from the continued reduction of
industrial fuel supplies delivered to Gaza Power Plant and the Plant’s total
shutoff. This will impact all the aspects
of daily life and public services provided to civilians.

 

PCR
has continuingly followed up the power chronic crisis in the Gaza Strip.
According to investigations conducted by PCHR:

 

 On
20 November 2009, the European Union (EU) stopped providing funds required to
cover the cost of purchasing the industrial fuel necessary to operate the Gaza
Power Plant. These funds, estimated at 50 million NIS per month, are part of
the financial aid that the EU is committed to provide to the Palestinian
National Authority (PNA).

 After
the EU had suspended the transfer of funds, the Palestinian Energy Authority
should take its responsibilities relative to financing and supplying the
industrial fuel required for the Power Plant. From 20 November 2009 till 31 December 2009, the Energy Authority
managed to ensure the sum of approximately 70 million NIS through the Ministry
of Finance in Ramallah.

 This
month, the Energy Authority announced that it is unable to supply the quantity
of industrial fuel (8.8 million litters) allowed to enter to Gaza by the
Israeli occupation authority. The Energy
Authority has managed to supply only 6.5 million liters of industrial fuel to
the Gaza Strip this month. Thus, the
Power Plant has been supplied with 74% of quantities of industrial fuel allowed
to enter to Gaza.

 On
23 January 2010, the Power Plant announced that one of its two turbines was
shut off due to severe shortage in the quantity of industrial fuel in
stock. The Plant announced also that the
quantities of the industrial fuel supplied to the plant were enough to operate
one turbine for 4 days only. The
productivity capacity of the Plant dropped from 60 MW to 30 MW. The Plant produces 30% of the electrical
power available in the Gaza Strip (197 MW), which constitutes approximately 73%
of Gaza’s real needs which are equal to 270 MW. By reducing the production of the Plant to the half, the deficit of
electrical power in the Gaza Strip has increased to 42%.


 This
compound deficit of electrical power has resulted in power outage in wide areas
across the Gaza Strip. Power is provided
for eight hours and then cut off for another eight hours in each area. Gaza city and its neighborhoods, where basic
services are focused, are the most affected areas due to this power deficit.

 The
Energy Authority referred its failure to supply the industrial fuel to its
financial deficit, which is the result of nonpayment by the Gaza Electricity
Distribution Company (GEDCO) of its bills estimated at 55 million NIS per
month. GEDCO transfers only 20 million
NIS monthly to the Energy Authority. This transferred amount is enough to cover
the cots of limited quantities of industrial fuel.

 GEDCO
reported that the Company is not able to pay its bills to the Energy Authority
and that the Company suffers annual losses because the beneficiaries who
receive GEDCO’s services are not committed to the payment of their power
bills. GEDCO collects between 15 and 20
million NIS monthly out of 55 million NIS. The Company transfers between 12 to 17 million NIS to the Energy
Authority and the rest is spent to cover GEDCO’s operational costs, networks
maintenance and salaries.

 It
should be noted that Gaza Power Plant is a stock company. A third of the
Company’s shares are owned by Morganti, an American company. The Palestinian
Development and Investment Company (PADICO), Pal Tel Group, the Arab Bank and
other companies own the second third of the Plant’s shares, while the third
third is owned by individual shareholders. The Plant was registered on 26 June 1999, with declared and subscribed
capital of US$ 60 million. In 2008, the
Company net revenues registered US$ 6.278 million, while in 2007, its revenues
amounted to US$ 4.355 million.

 The
Palestinian Energy Authority was established in 1995. In accordance with its establishment law, it
enjoys an independent nominal character. It belongs to PNA President. Under the implementation agreement entered into between the Gaza Power
Plant and PNA, the Energy Authority is committed to finance and supply the
industrial fuel required to operate the Plant. The Energy Authority is also committed to purchase the Plant’s power
production for 20 years. It is also
committed to monthly pay the amount of US$ 2.5 million to the Plant as fixed
operational costs.

  GEDCO, which was established in 1998 by a
ministerial decision, is a limited liability company established in partnership
between PNA, represented by the Energy Authority and the Ministry of Finance,
on one hand, and municipalities and local councils in the Gaza Strip on the
other hand. GEDCO has no direct relation
with the Gaza Power Plant. The Energy
Authority acts as the mediator between GEDCO and the Plant, as it purchases the
power from the Plant and sells it to GEDCO. GEDCO suffers annual losses and is unable to pay its bills due to the
Energy Authority. As 60- 70% of
beneficiaries have not paid their bills since 2000, beneficiaries owe
approximately US$ 2.7 billion to GEDCO.

 



 

 

In view of the above, PCHR:

 

  1. Warns of the catastrophic impacts of the shutoff
    of facilities that provide basic services to Gaza civilians in the case of
    electrical power outage continues. In case of continued outage, daily
    public services will be affected, especially hospitals, water facilities
    and sanitation.
  2. Calls for finding urgent and prompt solutions to
    ensure the flow of the industrial fuel supply to the Power Production
    Plant, and for putting an end to this chronic crisis.
  3. Calls for opening a thorough investigation into
    the current electrical power crisis, following up dues collection methods
    adopted by GEDCO and finding lasting solutions, regardless of the
    availability of external funds.
  4. Calls for considering the agreement between the
    Power Plant and the Energy Authority. We can not understand the large size of revenues made by the Power
    Plant in view of the growing power crisis in the Gaza Strip.
  5. PCHR has preservations on the aid method adopted
    by EU, represented in providing funds to cover the costs of the industrial
    fuel. This aid has encouraged
    thousands of civilians not to pay their power bills, in spite of their
    ability to pay these bill, under the pretext of the availability of
    external financial support. This is
    not in the interest of people.
  6. PCHR recognizes that the ongoing siege imposed on
    Gaza for three years has resulted in catastrophic economic conditions and
    has made thousands of Palestinian families in Gaza unable to cover their
    basic needs, including power bills. However, the method of aid provided to these families should be
    reconsidered. A mechanism of
    cooperation between ministries and concerned parties should be developed
    in order to help poor families to pay their power bills.
  7. Reiterates that the failure of authorities
    responsible for this crisis should not impact people who are committed to
    the payment of their monthly power bills. Thus, these authorities must
    supply power to these civilians under all circumstances.