Private electricity providers have said they will lose out in a multi-million dollar

scheme that will reform the generation and distribution of electricity in eight provinces.

The president of the Banteay Meanchey Rural Electricity Enterprise Association, Leap

Man, said his organization's 14 members had only been given a one-year operating

license or temporary permission to supply electricity.

"I asked for a long-term license and [for the government] to allow the private

sector to continue in business by eventually connecting to the national grid,"

said Leap Man. "But now we will just have to throw away our jobs and won't be

able to get back any of our investment."

The provincial power supply project will cost $24 million, most of which will be

funded by way of an $18.8 million loan from the Asian Development Bank (ADB). It

is designed to create cheaper electricity, and improve the supply nationwide.

The provinces that will benefit are Svay Rieng, Takeo, Prey Veng, Kampot, Kampong

Speu, Banteay Meanchey, Stung Treng and Ratanakkiri. The tendering process for the

rehabilitation project is set to begin in April.

In three provinces the government will use the existing generating capacity in three

provinces, but rehabilitate the distribution network. In the five remaining provinces

the project will build both generating and distribution infrastructure.

The result is that small providers in the eight provinces are worried they will be

put out of business. The head of the government's regulatory body, the Electricity

Authority of Cambodia, admitted that was likely.

Dr Ty Norin said rural providers would likely close of their own accord once they

found they were unable to compete on price with the state-owned utility company,

Electricité du Cambodge (EDC).

"[Until now] the private sector has supplied electricity and there are no standards

and no safety protection," he said. "We won't shut them down, but they

will shut down automatically."

But the small suppliers said the fact the government was only issuing short-term

licenses indicated they would be muscled out regardless of price.

Leap Man said his members had been shut out of the decision making process. He believes

the private providers will have to close when EDC starts operating.

"We would like licenses for at least ten years," he said. "If the

government is importing electricity from Thailand, we can still work as the supplier.

We want to discuss how to join up to the national grid."

Yim Nolson, EDC's deputy managing director, said the short-term nature of the licenses

meant very few licensees would still be operating by the time the project commenced.

"Most of the licenses in the eight provinces will have expired," Yim Nolson

said. "Those private providers will be aware that they will finish after that

time."

The government's move has alarmed some involved in promoting small business. Tony

Knowles of the locally-based NGO Small and Medium Enterprise Cambodia, said small

electricity providers had been seriously affected by delays and lack of information.

He said cutting private entrepreneurs out of the development process, as had happened

in this case, was dangerous as it did not take into account local conditions.

"There's a strong tendency that bigger is better, but recent trends call that

into question," said Knowles. "This project is symptomatic of a larger

question about decentralization and mobilizing Cambodian resources and money."