Doubling down on a populist promise yesterday, Prime Minister Hun Sen ordered Phnom Penh’s water supplier not only to lower its rates, but also to compensate customers who had been charged extra under a new payment scheme introduced in May, saying the higher prices were unfair.
Having first alluded to the rate reduction in a speech to garment workers on Sunday, the premier yesterday in a Facebook post ordered the Ministry of Industry and Handicrafts to work with the Phnom Penh Water Supply Authority (PPWSA) to reinstate the old payment system, recalculate bills paid since it was introduced, and pay back the difference.
In response, the PPWSA – a publicly listed state-run utility company on the Cambodian Securities Exchange – immediately issued a letter vowing to refund the money and apologising to customers.
“We promise not to let such a mistake happen for a second time,” said the letter, which was disseminated via local media.
Though the letter characterised the higher prices as a mistake, PPWSA’s chief of accounting and finance, Ros Kimleang, said the rate hike was instated to boost revenue to pay back some $100 million in loans from development partners taken out to expand services.
“We follow the government plan that, by 2020, Phnom Penh residents need to have enough clean water, and to achieve that we need to invest more in treatment facilities,” he said.
Asked whether the prime minister’s intervention to curb prices would impact the company’s ability to pay the loans or expand its services, Kimleang said he believed the government and Ministry of Industry, which regulates water utilities, would have a plan to “ensure the organisation will sustainably operate in the future”.
The new water rates scheme, approved by Minister of Industry Cham Prasidh, split consumers into categories of consumption, with those at the highest end of the spectrum paying 1,450 riel per cubic metre.
On Sunday, Hun Sen said the maximum price would decrease to 800 riel per cubic metre.
In his post yesterday, the premier said he had received criticism about high prices from people on social media, a similar justification to ones employed for past measures widely considered populist ploys.
In one such move, he scrapped mandatory licensing for all drivers just as the Ministry of Interior was attempting to roll out a stricter Traffic Law, and in another, removed unpopular tolls on roads in contravention of agreements with the companies operating them.
Cambodia National Rescue Party lawmaker Son Chhay, for his part, said he approved of the decision, which he thought was “in the interests of ordinary people”.
But political analyst Ou Virak, founder of the Future Forum think tank, said such abrupt policy decisions by the premier undermined his ministers, and were designed to secure votes. But, even so, they were far from a surprise, he added.
“It’s a populist policy, but in most democracies around the world, politicians come up with populist policies,” Virak.
“The ministers stand to be always undermined by the prime minister, this has always been the case, he makes a decision and every decision before that is going to be the wrong decision, regardless.”