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Tuesday, June 18, 2024

EDL to Be Overhauled Following Massive Debt and Losses

This Week

The Managing Director of Electricité du Laos (EDL) has stated that the state-owned enterprise must undergo reforms to correct operations issues leading to continued losses.

Mr. Chanthaboun Soukarun, Managing Director of Electricité Du Laos and National Assembly member for Champassak province, said during the National Assembly Session that EDL’s continued debt and lack of revenue makes reforms of the state-owned company necessary.

He said that EDL is a monopoly which should generate revenue. However, despite the many dams which make Laos “the battery of Southeast Asia,” debts and lack of profit have been ongoing. According to the Managing Director, issues which lead to losses include the reality that electricity prices cannot be raised so high that electricity is inaccessible to Lao people, and that EDL must borrow money to bring electricity to rural areas. Importantly, because Laos’ dams are owned by private investors, EDL must buy the electricity from those dams and projects, then resell it. This process is especially unprofitable because EDL must buy electricity in foreign currency, then sell it in Lao Kip.

Following the call for EDL’s reform, the Government of Laos set up a special committee to investigate the causes of the losses and to lead reforms of the state enterprise. This is part of larger attempts to reign in bloated but underperforming state enterprises. According to The Vientiane Times, the Prime Minister has stated that embezzlement, poor management, and nepotism are the main causes for the losses recorded by most of the state’s 178 enterprises.

The reform committee for EDL includes EDL’s Managing Director, Mr. Chanthaboun Soukaloun, and other relevant senior officials and executives.

Dr. Daovong Phonekeo, Minister of Energy and Mines, said that reforming the state enterprise is critical in order for it to fulfill its obligations and respond to the requirements of the people.

Laos recently began selling shares in its state enterprises to local investors as part of reforms designed to unburden the state amid economic woes.

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