RAK residents in uproar over high utility rates

Al Hamra Village in Ras Al Khaimah. The Northern Emirates have suffered from chronic power shortages for years. Pawan Singh / The National

Al Hamra Village residents in Ras Al Khaimah are being charged thousands of dirhams more in utility surcharges than in other parts of the emirate.

Residents, some of whom have been struggling to rectify the situation since they moved in, are being charged rates set by Al Ghail Power LLC, which is responsible for providing electricity to free zone businesses and residences.

Due to frequent power shortages in the Northern Emirates, Al Ghail built stationary gas generators over the past few years to provide electricity at rates independent of government subsidies.

Electricity for all but a small number of families in Al Hamra is provided at 43 fils per kWh, a rate that does not include the fluctuating gas surcharge every month.

Businesses and residences in RAK that are provided power and water by the Federal Energy and Water Authority pay between 23 and 38 fils per kWh.

“Notice how they gloss over the fuel surcharge of 17 fils per kWh,” said D N T, the owner of a townhouse in Al Hamra. “My July bill is Dh1,400. It’s just over Dh400 more than what I should be charged. All because of this surcharge, which can increase at any point.”

According to figures, residents living in Al Hamra would see their bills halved if they had Fewa services.

A memo on Al Ghail’s website revealed that not everyone is subject to the same billing formula.

“The first phase [in 2008] was all serviced by Fewa,” said D N T. “That was two rows of townhouses, but RAK came under a power crunch across the whole emirate, so then they decided to only give power to locals. Everyone else was running on generators.”

According to the developer’s website, the current rate of 43 fils is only applicable from August to December this year, at which point Al Ghail is free to raise its rates.

“At what level does it stop?” said P S, who bought his townhouse six years ago. “At this moment these surcharges aren’t announced and there is no actual formula for calculating, so I can’t tell you what I’ll be charged in the future.”

P S said he paid Fewa a connection fee of Dh14,500 upon buying his house, but does not receive services from the agency.

Initially, Al Hamra installed generators as a temporary solution, which residents said provided electricity at a cheaper rate. However, last year, the generators were replaced with an electricity service station set up by Al Ghail.

That is when residents noticed a sharp hike in the prices of utilities.

“That was my first grievance,” P S said. “Take into account the surcharges and my last bill was 160 per cent more than what I should have paid with Fewa. Utilities are climbing at a phenomenal rate.” He said he did not know why Al Hamra had not been connected to Fewa as planned.

The developer said that it, too, was suffering from the same price increases.

“The grid is there, the infrastructure is there, but Fewa doesn’t have the capacity to provide this additional power,” said Berry Ibrahimy, head of commercial at Al Hamra Real Estate Development. “We are the biggest property owners here, and we are restricted as much as everyone else. Every rule change in the utility rate affects us as much as anyone else.”

The Northern Emirates have suffered from chronic power shortages for years.

According to Mr Ibrahimy, while his residential properties are subject to the same fees as private owners, Al Hamra’s hotel and mall properties are exempt.

“But today we only have two options for electricity, Fewa and Al Ghail,” he said “Fewa can’t increase the power so, therefore, the choice is between having power and not having power.”