The labor unrest in Iran has reached the country’s power generation industry and for the first time, the head of the electricity network workers syndicate announced that the government owes it $5 billion, adding, “Our debt to the banks is also 5,000 billion Toman (equivalent to $5 billion) and under these conditions there are some 900,000 workers in our industry facing unemployment and the continuation of this situation will soon lead to the crises if blackouts.”
Iran’s labor news agency ILNA reports that the government owes a disconcerting $5 billion to the syndicate. This unprecedented amount to the electricity industry is primarily in pays to the workers who are directly or indirectly involved in the electricity industry, a situation that threatens manufacturing units producing electricity generation/distribution equipment.
Mohammad Parsa, the head of the electricity industry syndicate told ILNA, “Numerous problems threaten the electricity equipment production plants. Currently, many units are either closed or are working under capacity.” He warned officials about the possibility of many production units shutting down and added, “Unfortunately the size of the government’s debt to the syndicate is so large that unless a solution is found to the problem, many production units will have to shut down laying off some 900,000 workers who directly or indirectly work for the industry.”
In another part of his interview, Parsa talked about Ahmadinejad administration’s failure to honor its financial commitments, adding, “Because the government has not paid up its debt in time, we have not been able to clear our own debts. As a result, our debt to the banks too has become very high. So we are under pressure from banks while the members too are fighting legal battles with each.”
Crisis Began With Majlis Decision
Parsa believes that the crisis began when the seventh conservative Majlis (which ended last year) began the crises by freezing prices, adding, “From the time when the Majlis decided to stabilize the price of electricity, the ministry of power could no longer pay up its debts to the electricity industry and gradually tumbled into crisis. In any case, when the balance in the ministry of power is disrupted, everybody who works with this agency is impacted.”
“The ministry of power owes us $5 billion of which 40 percent is owed by Mina. Banks claim more than 5,000 billion Toman from us (about $5 billion). We are now in talks with some banks to write off our debts. Some banks have taken legal measures against us. In any case, we are no longer able to fight this battle and say afloat. We are loosing money and some managers have fled. Believe some of our managers are not going home because their checks have bounced and make arrangements to see me in a car to talk about their problems, like a fugitive,” Parsa said.
Parsa said that the current crisis is also threatening the exports of the electricity equipment production units. “The government buys 99 percent of our products. The ministry of oil and power are the biggest customers. But when they buy without paying the cost, we are thrown off financial balance. This is threatening our exports. We have labor problems. Avengan Company is fully shut down. We had export plans to Pakistan but because of the daily strikes at the company, production is completely suspended. Workers who have not been paid are preventing the use of the primary material at the plant and do not allow it to leave the plan, causing us all kinds of problems.”
Series Threat to Exports
The head of the workers syndicate for electricity equipment producing plants predicts that unless the current hot problems are solved, there will be blackouts in the country and that the continuation of this situation would certainly threaten the exports of the industry. “This industry earns about 1.5 to 2 billion USD in exports per year. But if the current problems and issues continue, we will not be able to meet our commitments to foreign markets and will lose our markets. This industry has the largest share in the exports of technical and engineering services.” Parsa said that currently the industry operated at only 30 percent of its capacity and that the Chinese and the Indians were taking over the markets that Iran once had. He concluded his interview by criticizing the situation in which the government’s non-payment of its dues is not penalized with late payment interests while the banks charge late fees for our non-repayment of our debts to them.
