MPs are set to vote tomorrow on a proposal to subsidise the utility bills of Bahraini-owned small and medium enterprises.

Parliament’s public utilities and environment committee believes that the move could support Bahraini businessmen as well as advance the economic development in the country.

According to the committee, the support will include charging nine fils per unit for consumption between one and 5,000 units of electricity, 16 fils per unit for consumption from 5,001 to 10,000 units and 29 fils per unit for consumption of more than 10,000 units.

Committee chairman Bader Al Tamimi said that there are many businesses struggling financially due to increasing costs, especially utility bills.

However, the Electricity and Water Affairs Ministry said the proposed benefits are already being covered.

“The government supports the non-domestic consumption segment to up to 5,000 units, amounting to a cost exceeding BD20,000,000 last year,” it said.

“This support to the non-domestic consumption sector was aimed at small traders who own small and medium enterprises who make up more than 80 per cent of non-domestic consumption.

“An additional subsidy will lead to a significant reduction in the Electricity and Water Authority (EWA) revenues as well as create an imbalance between expenditure and revenue which isn’t in line with the financial balance programme.”

According to the ministry, additional subsidies will hinder EWA plans to raise the efficiency of performance and provide better services to customers while also negatively impacting the investment environment in Bahrain and its developmental process.

It also added that further increases in subsidies ‘will encourage wasteful consumption of electricity and water’.

“This will lead to a lack of rationalising the consumption of natural resources which EWA is working hard to achieve and allocates a large budget towards,” added the ministry.

“It will lead to the depletion of resources – especially natural gas – and will also cause environmental pollution at a time when the kingdom pays a lot of attention towards implementing programmes aimed at preserving the environment.”

Meanwhile, the Bahrain Development for SME Society backed the proposal by stating that it will achieve direct and indirect positive results to individuals and the community as a whole.

It added that it will support the Bahraini merchant through facilitating the process to open and develop a business while also reducing financial burden in addition to ensuring the continuity and development of local projects.

“Among our goals is to support and embrace small projects to grow, prosper and develop as well as striving to provide everything that contributes to the continuity of activities to move forward successfully,” said the society in its response to Parliament.

“This proposal will motivate individuals to create more opportunities for themselves, promote the local Bahraini market as well as contribute to alleviating the situation of several troubled institutions and improve their conditions.”

The committee will discuss the proposal in Parliament’s weekly session tomorrow and urge its approval.

 

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