Coming to think of loss-making state corporations, the first name to figure because of regularly hitting the headlines is the Nepal Oil Corporation. But, Nepal Electricity Authority (NEA) is also not far behind in incurring a loss of billions of rupees every year. This bleak scenario is due to faulty planning and implementation of projects where individuals or a handful are given prominence and the overall interest of the country is discarded into the dustbin. The decisions that the NEA Board of Directors make from time to time, particularly its line of future action and the policies to be followed including that of the Power Purchase Agreement (PPA), nothing comes in for public debate. Every such decision is done in a hush-hush manner keeping the public at large in the dark. While transparency as such is missing, corruption and the vested interests of a few rule the roost. This is reason enough for a greater policy debate among all the stakeholders and a transparent policy initiative by all the major political parties. If these come into play then a few would not be able to make decisions in their favour mostly to do with kick-backs. Faulty PPAs on Khimti and Bhotekoshi hydro-power projects have resulted in an annual loss of Rs. 200 million to the NEA. Such would not have happened had the related issues come out for public debate.
It is true that foreign direct investment (FDI) may be or is required for hydro-power projects because of the high costs and the long gestation period. Of course, at present there are a number of power projects with domestic investment. But, the big ones have to look for foreign investors. As for FDI, the PPA is calculated in US dollars, which has been quite a controversial issue. And, Khimti hydro-project is pointed out for the losses that the NEA is incurring because of the foreign exchange base of PPA. The rise in the value of the foreign exchange concerned, NEA has to go on paying more every year — the reason for the increase in its loss to the tune of billions of rupees. All this is a consequence of the lack of transparency and greater public debate among the stakeholders. Whenever the talk of PPA comes up, the thrust ought to be on Nepal’s strategic development objectives rather than serving the financial interests of a small group of individuals and political leaders.
On the issue of FDI and foreign exchange risk, Chief Secretary and former Chairman of NEA has gone on to say that the former is necessary while it is also a fact the exchange rates’ upward swing tends to put the NEA at great risks and the result is massive losses. He also has said that as the NEA chairman, the board had made some five dozen decisions in the interest of NEA. But, the incumbent Energy Minister has sent signals that they would not come in for implementation. The question that arises is, what decisions were made when the chief secretary was the NEA chairman. All is shrouded in mystery which should not have been the case. The behind the curtain decisions have to be discontinued, and greater public debate among the stakeholders should be the modus operandi besides transparency and the support of the major parties.
Source : The Himalayan Times / Editorial