Economy June 30, 2016 | 1:23 pm

Power companies want electricity pact before fiscal one

Santo Domingo.- The proposals on the need for a fiscal pacthave started before the electricity pact has been signed, raising concern amongsectors which say the latter must concludebefore the start of talks for the one on taxes.

"The electricity problem has for decades been one of theState’s major financial problems, therefore, the Dominican power companies (ADIE)consider that the electricity pact must precede the fiscal pact, since thesolution to this problem would result in great benefits for the nationaleconomy," said in a statement quoted by diariolibre.com.

ADIE vice president Milton Morrison on Thursday said if thecountry’s priority isn’t set, it would lead to a fiscal pact without knowinghow much resources are needed to cover it, “for example, the deficit in theelectricity tariff, if the government doesn’t want to apply the technical formulaimmediately.”

He said the government wouldn’t have the information toidentify the resources needed for the electricity subsidy for the light bondand wouldn’t know the amounts the electricity distributors would need to reducetheir heavy losses currently hovering between 31% and 33 %.

He said preliminary studies show that around 50 milliondollars are needed yearly to reduce distribution losses. "If you want toreduce 3% you’re talking about an investment of 150 million dollars a year,which must be stipulated in the budget."

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