GOC representatives meet with El Gouna Management on Utility Prices
Last week, three representatives of The Gouna Owners Club (GOC), Mark Pigden, Samia Baladi and Mira Rabih met with Mr. Thomas Azer, El Gouna Deputy General Manager and Electrical Department Manager. The objective of the meeting was to seek clarification for concerns behind the recently announced Increase in water and electricity prices.
Further to the meeting, the GOC kindly shared the proceedings with Gouna News so that residents of El Gouna can get a better understanding on what drives the prices. Our thanks to Mark, Samia and Mira for preparing this report.
The information provided to GOC, much of it technical, was provided by Mr. Azer in a non-technical way, referring to government documents that were readable by 2 Arabic speaking members. His time in meeting with GOC was appreciated and he was able to explain the costs of utilities provided from Orascom. After the meeting Thomas Azer kindly took GOC representatives to electricity stations, back up generator units, water treatment locations and storage wells. All appeared well maintained.
ELECTRICITY
For electricity services provided to Gouna from Safaga, Orascom pay .965 EGP / KWhr. In addition, Orascom have a maintenance contract with the government, which is 3 million EGP a year. This contract covers the transportation of electricity to El Gouna from Safaga. This cost is considered within the overall pricing to El Gouna users.
Within El Gouna, distribution is maintained by Orascom El Gouna Electricity Department, which is comprised of 3 sections:
1-Generation, 2-Transportation, 3-Distribution.
The starting price from the government to El Gouna is at the aforementioned price of EGP .965, then there are addditional costs. The additional costs for Orascom Electric Company, which were shown to GOC, increase the price up to 1.32 EGP. These are
1- Maintenance Contract with government
2- El Gouna local network maintenance
3-Salaries for Gouna sub station workers
4-General expenses (Substations)
5-Public services (computerised readings)
6-Depreciation (loss of power in transport)
7-Taxes
There are circuit breakers in the sub transmission buildings in the Industrial area within El Gouna that are monitored 24 hrs a day to manage the fluctuations in the transport of electricity to Gouna. These are maintained and monitored by Gouna Electric Company staff.
Moreover, El Gouna Electric Company has 3 buildings housing backup generators. Two have 12 units and the other has 5 units. These are maintained and used in the case of a power cut from Safaga. Prior to these being started up, there is a waiting period and a lead time in preparation, of approx 40 minutes. These generators can only provide a percentage of what the whole of El Gouna would require. A rota system is therefore employed to ensure areas are not without electricity for extended periods.
Final cost came to 1.32 EGP / KWHr. Orascom charges EGP 1.35 which is the maximum figure allowed by the government to charge. There is a 3 piaster difference.
The hospital and some hotels have their own generators.
When GOC representatives asked if Gouna could be self sufficient with their own generators, it was indicated that the cost would far exceed current costs, which is why generators are used only for emergency backup.
There was a TIER system in El Gouna up until the increase in July 2016. Since then the highest rate published by the government was applied for all levels of consumption.
Orascom Electric Company subsidises the low cost housing in Diyar Bustan for low income families. The charge to them is .95 EGP per KW/Hr
All new developments in Gouna have the costs of the infrastructure for electricity and water structured into the building costs. Additional sub stations and water treatments are created on land nearby where necessary.
WATER
El Gouna consumes around 13,000 cubic metres of soft water per day. Water is provided via water desalination plants in El Gouna. 500 cubic metres per day are supplied from Hurghada, in the winter months only, nothing in the summer. The water provided from Hurghada would not fulfil the requirements of the town. Therefore over 90% of water provided to consumers in El Gouna is from the desalination plants on site.
Irrigation water is brought in from Hurghada but still has to go through a treatment process in El Gouna before being distributed. Depending on the consumption, it does, on occasion, have less filtering as per local requirements.
When GOC asked about the foul smelling irrigation water, Mr. Azer mentioned that they use a natural product in the irrigation water to not negatively affect the plants and grass.
The desalination process uses electricity. This adds to the cost of the cubic meter. Each cubic metre of water to be processed requires 5.5 kw of electricity, plus chemicals.
There are also wells which, when used, require payments to the Ministry of Agriculture. GOC were shown a government directive on this, signed by the Prime Minister's office.
As for water costs, for the Sinai, Matruh and Red Sea Governorates, the price per cubic meter is 6.9 EGP. Pressurizing the water, cleaning it and distributing it from the Nile Valley to another governorate, inflates the price to EGP 12.67. However, only a maximum of 500 cubic metres per day is provided to El Gouna by the government, and this only in winter months.
There are additional costs for storing water in tanks in Gouna, plus replacement of membranes in the tanks, at an annual cost of USD 62,000.
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