NEA allocates just Rs 1.75b for projects

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    The Nepal Electricity Authority (NEA) will spend just around three percent of its annual budget of Rs 60.23 billion in construction of projects. The state-owned body for generation, transmission and distribution of electricity has allocated just Rs 1.75 billion for construction of projects in the current fiscal year.

    The budget plan already approved by the NEA board has allocated Rs 55.44 billion for operation maintenance expenses and Rs 3.50 billion for capital expenditure. The low allocation by NEA, that has constructed projects with combined installed capacity of 550 MW out of the total current installed capacity of 780 MW, means that new projects are unlikely to be constructed in the current fiscal year.

    “The amount to be invested by NEA has been falling in recent years. We have to spend more on procurement of electricity nowadays,” Managing Director (MD) of NEA Mukesh Raj Kafle said. The NEA spends around Rs 40 billion in procurement of electricity alone. It is set to import electricity worth Rs 21 billion from India in the current year apart from buying from private promoters in Nepal.

    The NEA earlier used to develop big projects itself. But it is constructing Trishuli 3 A (60 MW), Rahughat (32 MW), Chameliaya (30 MW), and Kulekhani III (13 MW) now. It has also made equity investment in 456-MW Upper Tamakoshi, Rasuwagadi, Bhotekoshi and other projects being developed through a subsidiary company.

    Future of the NEA, that has already invested over Rs 24 billion in hydropower projects, is set to be in crisis due to falling investment owing to increasing recurrent expenditure. The NEA, with accumulated loss of over R 27 billion, annually sells electricity worth Rs 51.23 billion.

    Financial balance of the NEA is being affected as it has to spend 80 percent of its income in procurement of electricity. The government had written off NEA’s accumulated loss of Rs 27 billion in 2067/68 but loss has again reached that level in five years.

    Source : Karobar Daily