Govt decides to form transmission grid company

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    KATHMANDU, Feb 18 : The government has decided to form National Transmission Grid Company (NTGC), paving the way for formation of a separate entity to work for development and operation of electricity transmission lines.

    The cabinet meeting held on Thursday took the decision, 14 years after the plan was first mooted. The plan to unbundle works related to transmission lines from Nepal Electricity Authority (NEA) was first announced in Hydropower Development Policy 2001.

    Keshav Dhwaj Adhikari, spokesperson of the Ministry of Energy, said the new company will concentrate on construction and operation of transmission lines.

    The government had been announcing plan to unbundle works related to transmission lines from NEA for the past many years, mainly because delay in construction of transmission line projects was affected power generation by hydropower projects.

    Slow progress in construction of transmission line projects has remained one of the impediments to hydropower development in the country.

    Several transmission line projects like Thankot-Chapagaun-Bhaktapur Transmission Line Project, Khimti-Dhalkebar Transmission line and Pathlaiya-Parwanipur Transmission Line have suffered from various factors. Delay in construction of transmission lines is affecting power generation from different projects.

    According to the plan, different ministries will hold stakes in the proposed company. The company will bring all transmission lines from NEA under its ambit. The proposed company will have authorized capital of Rs 25 billion and issued capital of Rs 5 billion. Its shares will have face value of Rs 1,000 each. The promoters have showed willingness to put as much as Rs 2 billion into the proposed company right away.

    Ministry of Energy will own 700,000 units of shares in the company, while NEA and Ministry of Finance will hold 500,000 and 400,000 units of shares, respectively. Likewise, Ministry of Forest and Soil Conservation, Ministry of Environment, Science and Technology, Ministry of Land Reforms and Management, Ministry of Information and Communications, Ministry of Defense and Ministry of Home Affairs will hold 80,000 units of shares each.

    The company will have a six-member board. One director will be from NEA, while directors will be nominated by different ministries. Similarly, one director will be selected from public shareholders. The number of shares to be offered to general public, however, is yet to be decided.

    The proposed company plans to introduce wheeling charge system to generate resources. “The government will decide the wheeling charge for the time being. Later on, it will be decided by the Electricity Regulatory Commission,” said Adhikari.

    The law for the formation of the commission, a regulatory agency for hydropower sector, is in the drafting phase.

    Private sector has lauded the decision to form the transmission grid company. Khadga Bahadur Bisht, president of Independent Power Producers´ Association Nepal, said he was hopeful that the company will focus on development of transmission lines and also ensure equal access to transmission lines to all developers.

    Delay in construction of transmission lines has affected many hydropower projects. Mai Hydropower Project based in Ilam is one such project which could generate power only couple of weeks ago even though it was completed more than three months ago.

    According to officials, problems in land acquisition, protest by locals and difficult topography are the major factors affecting construction of transmission lines.

    Separation of transmission line works from NEA is expected to ease workload of the power utility. It will also help NEA to reduce energy loss during transmission which accounts for about one-fourth of its total system supply.

    Source : Republica