NEA preparing to raise tariff without fulfilling commitments

” Private sector to not give consent to raise tariff “

KATHMANDU, Jan 8

electricity rateThe Nepal Electricity Authority (NEA) is again preparing to raise tariff without fulfilling any commitments made before raising the tariff the last time. The private sector has stated that it will not give consent to raise tariff now.

NEA had made commitments of reducing load-shedding and leakage, cutting administrative expenses, and not charging demand fees at the time of power cuts while raising the tariff by 20 percent one and half years ago. None of these commitments have been fulfilled yet and the Federation of Nepalese Chambers of Commerce and Industry (FNCCI) plans to not give consent to tariff hike until the commitments are implemented. Vice President of FNCCI Pashupati Murarka is representing the private sector in the Electricity Tariff Fixation Commission (ETFC).

NEA last May had proposed with ETFC to again hike tariff by 20 percent to break even stating that it is suffering annual loss of over Rs 4.50 billion after selling electricity at a rate lower than the rate of purchase. ETFC is going to publish public notice to receive response from the commoners for implementation of the proposal but FNCCI has stated that the public notice cannot be issued until there is agreement. Only ETFC has the right to raise electricity tariff. ETFC Chairman Ganesh Prasad Subba stated that the agreement will be reached soon.

Load-shedding has now increased to 12 hours a day while leakage is 25.9 percent, according to NEA. It had expressed commitment to reduce leakage to 23 percent and slash operating cost. ETFC had also directed NEA to cut the electricity facilities granted to NEA staffers.

Murarka, who is also an ETFC member, stated that he does not agree with the decision to publish notice to receive response of consumers about raising tariff. “None of the commitments made by NEA have been fulfilled. FNCCI, therefore, will not cooperate in raising tariff this time,” he said. He reminded that FNCCI had agreed for tariff hike the last time around on the basis of commitments made by NEA about reducing load-shedding, bringing down leakage to 23 percent, cutting administrative expenses, and not charging demand fees at the time of power cuts. “Why should I agree for tariff hike when NEA has not fulfilled those commitments?” he asked. He added that the government has not even fulfilled the commitment of reducing interest rate on loans given to NEA.

 He opined that the policy of NEA to recover the losses incurred due to weaknesses of management from the consumers is wrong. He complained that NEA has not even implemented the order of Supreme Court to not charge demand fees at the time of load-shedding.

NEA has been losing more than Rs 6 billion annually in revenues through leakage alone. The tariff rate for those using over 20 units a month was raised, keeping that for those using less than 20 units constant, from the last fiscal year. The cumulative loss of NEA has already reached Rs 9 billion though the government had written-off its accumulated loss of Rs 27.32 billion just two years ago. NEA is arguing that the tariff has to be raised by another 17 percent for break even.

Source : Karobar