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The story of State Electric Company (STELCO), Maldives

OPINION - by Mariyam Mohamed

Gayooms' multi-million dollar Palace in Male'

“The State Electric Company Ltd (STELCO) is, entirely, a state-owned organisation responsible for the generation and supply of electricity to customers throughout the Maldives. Operating from a Head Office in Male', the Company provides electricity and other related services to its customers for the safe and efficient use of electrical energy and to support the economic development of the Republic.

Founded in 1949 as the Electricity Department and later known as the Maldives Electricity Board, STELCO has expanded the public electricity supply from modest beginnings to today when it serves a total of around 13,000 customers on Male' and the Outer Islands. The Company celebrated its 50th Jubilee in June 2000 with the opening of its new Head Office building in Male'.” (www.stelco.com.mv)

Take a closer look at the table below. The company’s revenue growth is an average of 19% between 1995 and 1998. Fuel costs and other operating expenditures grew around 13 and 15 % respectively. Even this shows how successful it is in making money. Revenue growth is greater than the expense growth. It enjoyed a Net income growth of average 25% over this period. Look at the operating surplus it gets after deducting necessary expenses- an average of 93,000,000 million Rufiyaa!

Financial Performance of STELCO, Maldives (in millions of Rufiyaa)

Year	Gross Revenue	Growth rate	Fuel Costs	Growth rate	Other Operating Expenditure	Growth rate	Gross Operating Surplus/(Loss)a	Growth rate
1994	117		40.9		19.7		59.8
1995	154.5	32%	45.9	12%	24.9	26%	88.2	47%
1996	171.9	11%	52.5	14%	41.2	65%	79.2	-10%
1997	195.6	14%	60.4	15%	31.1	-25%	103.5	31%
1998	230.4	18%	65.5	8%	29	-7%	135.8	31%
Average of five years	173.88	19%	53.04	13%	29.18	15%	93.3	25%

Source: http://www.adb.org/Documents/PERs/PE560.pdf

It has definitely been one of the most successful companies in the Maldives.

Aren’t we proud of it? For a change, unlike Air Maldives and MIFCO, it is one company that is making huge profit year after year, instead of losses.

Now the question on your mind maybe how much we are paying for STELCO’s tremendous growth. Analyze the table below. It indicates gross revenue made by STELCO in the Census years; 1995, 2000 and the total number of population. Based on those two figures we get revenue per head which is 630.97 and 854.83 Rufiyaa respectively in the year of 1995, 1998. The 1988 figure will be higher than that since we used the census 2000 population figure.

How much are we paying for electricity?
	1995	1998
Gross Revenue	154,470,000	230,890,000
Census Population	244,814	270,101*
Revenue Per head (country)	630.97	854.83

* year 2000

Source: http://www.planning.gov.mv/yrb2002/statscd/Yearbook/pop02.htm

Source: http://www.adb.org/Documents/PERs/PE560.pdf

Now let’s zero in on the island which has the highest population – Male’

How much population of Male pay to STELCO
Revenue from Male’	184,930,000
population of Male’	74069*
Revenue per head in Male’	2,496.73

*Census 2000

Revenue per head is an astounding 2496.73 Rufiyaa! Yes. That is what we pay for STELCO, from the newborn child to the oldest family member who doesn’t earn an income. On average, how much income is earned by the few who have jobs 1500, 2000, 3000 Rufiyaa? Now think of your telephone bill, your water bill and how much do you pay to these companies. Who says in this country we don’t pay taxes. Imagine the amount you are paying in total, as taxes even though you are barely surviving? If this is not tax, than what is tax?

So what does STELCO say about their financial position and performance?

“The Company maintains a strong balance sheet and operates profitably. With the exception of borrowings for the construction of major projects, it finances its capital works and operations from its own revenue.” (www.stelco.com.mv)

They must be proudly talking about the money they take from us.

For a second, think of what will happen if we were able to save at least half of that money and start our own business. Imagine the economic growth it will result, not to mention increasing income for your family to live a decent life. Don’t shake your head. This is the facts of our life. This is development for you, with love from current regime.

Who will defend our interests and needs? The parliament? The president? The Ministers? At the moment, natural answer to that question is none. However, there is one way you can influence. Vote wisely in the coming election so that we can form a system which is responsive to our sufferings and needs.

As we look over the facts I can’t help but wonder about STELCO’s Commitment to Customer Service statement – “STELCO is committed to customer service and to improving the efficiency of its operations. Its vision is “To achieve total customer satisfaction through management excellence and staff satisfaction”.” (www.stelco.com.mv)

Hmmmm!!!

I leave for you to make your own judgements based on the facts.

End.

This report was compiled with reference from ASIAN DEVELOPMENT BANK Project performance Audit report