DESPITE saving $42 million from fuel imports per year with the opening of the Nadarivatu Hydro Electric Scheme, the Fiji Electricity Authority will not reduce bills charged to its customers.
This was confirmed by board chairman Nizam-ud-Dean. He said the FEA had a commitment to pay $24 million per year to financial institutions that had funded the successful construction of the new Nadarivatu energy project.
Mr Dean said FEA would also have to pay $100m in fuel costs per year to meet the ever-increasing electricity demand. The chairman also revealed the Nadarivatu project was made possible through the increase in tariffs the authority had implemented.
"The reason why the tariffs were put up was so projects like this can happen. We have to pay each year close to $US12m which is $24m Fijian which is to be paid to the China Development Bank (CDB), and local borrowers, ANZ Bank and Bank of South Pacific. We have to pay them back, the money doesn't stay with us, it just disappears. If we don't have the capital we can't develop.
"On top of that our fuel cost is $100m per year even with this new project so the money is going to go. If we reduce the tariffs we would not be able to survive because of the cost of building, the paying off of the debt, fuel, wages and salaries," he said.
Mr Dean also said it was important to know FEA offered a very low tariff.
"The main thing to remember is that Fiji electricity tariffs are the lowest in the South Pacific including Australia and New Zealand. Some countries charge more than $1 per unit while ours is 39c per unit. In terms of electricity prices if people may be thinking it is too much, the fact of the matter is we are still the lowest in the region," he said.
On the CDB loan he said: "We have a 15-year term to clear the loan but we are looking to borrow from local financial institutions to pay off the China Development Bank loan and we transfer all debts to that local borrower."
The Nadarivatu project cost more than $200m.