KUWAIT: Finance Minister and acting oil minister Anas Al-Saleh gestures as Electricity and Water Minister Ahmad Al-Jassar looks on during a parliament session at the National Assembly yesterday. - Photo by Yasser Al-Zayyat

KUWAIT: The National Assembly voted in the first round to allow the government to raise electricity and water charges on apartment buildings - mostly used by expatriates - and businesses, but exempted citizens.

Thirty-one MPs voted in favor and 17 members against the bill. The second and final round of voting will take place after two weeks, and MPs said they will introduce amendments to the bill. If given the final clearance, it will be the first time in 50 years that Kuwait will raise power charges.

According to the bill, those living in apartments will pay 5 fils per kilowatt for the first 1,000 kilowatts, 10 fils per kilowatt for between 1,000 and 2,000 kW and as much as 15 fils a kilowatt for consumption above 2,000 kW. Water prices will also be more than doubled. Citizens and those staying in private houses have been exempted and will continue to pay just 2 fils per kilowatt regardless of consumption. MPs are expected to also exempt tens of thousands of Kuwaiti families living in apartments while waiting for their turn to receive a government house.

It was not immediately clear when the new charges will be applied, but indications are that it will be applied only after installing smart power meters and could take up to one year. Initially, MPs rejected the draft law for including private houses, but then passed it when private houses were excluded.

Electricity and Water Minister Ahmad Al-Jassar said at Kuwait's current consumption of 15,000 megawatts, the government pays KD 2.660 billion in subsidies for electricity and water annually. He said that in 2035, consumption would triple and subsidies would hit KD. 7.6 billion if nothing is done to cut overconsumption and stop squandering of electricity and water. The aim of the government bill, which proposed higher tariffs, is to cut consumption by 30 percent and save billions of dinars that could be used to build houses, the minister said.

According to official statistics, Kuwaiti citizens account for 40 percent of power and 43 percent of water consumption, with expatriates consuming 20 percent of power and 22 percent of water, the minister said. The rest goes to other activities. Jassar said that 68 percent of citizens consume under 12,000 kW of electricity monthly and 57 percent of expats consume under 2,000 kW per month.

A majority of lawmakers expressed total opposition to the government's plan to increase charges on citizens, others called for smaller raises while a few MPs also called to exempt expatriates from the raise. MP Saleh Ashour described the proposed raise as "the biggest crime against citizens and expatriates".

Islamist MP Hamdan Al-Azemi said he is totally opposed to any increase in charges because it will eventually lead to raising prices of other commodities and goods, thus impacting the population. "Whenever the government fails, it goes directly to the pockets of the people. We are a rich country with a small population ... the principle of hikes is rejected because there is no justification," Azemi said. MP Jamal Al-Omar admitted the country is facing a crisis but insisted that it was caused not by the drop in oil prices alone, but also because of the government's failure, describing the government as "incapable" of managing the country.

The session included several clashes between MPs for various reasons, including between Azemi and Saadoun Hammad, who exchanged harsh words accusing each other of robbery and bribery. MP Adel Al-Khorafi said the country will still face a crisis even if oil price rises to $50 a barrel, blaming the highly inflated civil servants' salaries as part of the problem. He said he supports raising electricity charges but only after solving structural disorders in the economy.

MP Yousef Al-Zalzalah warned of the serious economic situation and cautioned it could impact the value of the Kuwaiti dinar. "A day might come when we can't pay salaries," Zalzalah warned. MP Mohammad Tana said he totally rejects any measure to tax citizens in any way. "Apply these measures on merchants and spare citizens," he said. MPs said they will submit several amendments for the second round of voting.

By B Izzak