New energy : NEW NEA MD’S BRIEF


    Nepal Electricity Authority (NEA), the government-owned utility involved in generation, transmission and distribution of electricity, recently got a new Managing Director in Rameshwar Yadav. The post had been lying vacant for over a year after Deependra Nath Sharma resigned in November 2011, over ‘internal’ matters. In this light, it is important to analyze the working condition the new MD is likely to find himself in.

    Today, NEA is bedeviled with many maladies and is in fact choking under an acute shortage of finance, pushing its stated objectives beyond reach. The gap between the public utility and people is growing since the only thing the common man understands is that it is NEA’s responsibility to give them round-the-clock electricity. Long hours of power cuts have paralyzed the country’s economic prospects and have badly disturbed even simple chores like water pumping, ironing and mobile charging. This has led to irritation and anxiety among the people. Of course, it will not be right to expect a miracle overnight. But given the will on the part of the new MD, it is possible to set right a lot of its problems.

    Undoubtedly, the new MD is surrounded by big and long-ignored challenges. As such, NEA’s visions are to be shaped in a way that benefits the nation and the organization, not a particular individual or group. Actions should be result-oriented, something which has not been the case in NEA. Since the new MD is obliged to submit his progress reports to NEA Board periodically, he is likely to introduce the system of job description, performance contract and periodic evaluation of responsibility-assigned employees in the organization. Equally important will be to delegate administrative and financial authority to them, based on the principle of power decentralization and fast decision making.

    NEA is an organization with more than 10,000 employees serving about 2.4 million consumers and handling about 700 MW power. The leadership has to deal with various expectations from employees, government, independent power producers, and consumers. Of them, the most important are the employees. If the leadership is entangled in problems within the office, it will be hard to perform well outside. In-house support for major decisions will give the new MD the confidence to quell controversies that may arise during their execution.

    However, a Managing Director cannot be a machine for fulfilling employees’ undue personal wishes and expectations like promotions, postings and transfers. A cordon of well-defined mechanisms should be drawn around the Managing Director to handle these issues.
    Though big in size, the efficiency of NEA is questionable, with some critics even comparing it to an old company, and calling for its complete overhaul. If it is well shielded from political interferences and allowed to perform on its own, success won’t be far away.

    Deregulated utilities everywhere in the world have exhibited organizational excellence in obtaining their goals and objectives.

    Chairmanship of the NEA Board is now bestowed upon the Chief Secretary of Nepal Government. In the past, difficulties have been experienced in the execution of generation and transmission projects where consents of other ministries were required. For example if project sites passed through forest areas, the approval of Ministry of Forest had to be sought. NEA will certainly benefit from the Chief Secretary’s presence in situations which call for the assistance of other ministries such as Finance, Forest, and Environment; in the chain of command, the Secretaries of all Ministries are supposed to obey the Chief Secretary’s directions. NEA leadership should explore ways to best utilize this context for the benefit of the organization, so that Board decisions can be successfully implemented across ministries.

    According to NEA Act 2041, NEA is supposed to recommend plans and policies to the government. If NEA is not visionary and far-sighted, government decisions on issues of generation, transmission and distribution of electricity are bound to fall short of expectations. The new NEA leadership needs to undertake rigorous homework and analysis before offering advice on government-related issues, enabling the organization to boldly claim ownership of its advice when the concerned decisions are carried out by the government. It will also help avoid embarrassing situations like the recent incidents pertaining to the installation of new diesel plants and augmentation of a hydroelectric project’s capacity.

    After Electricity Act 2049, NEA’s roles have been minimized. It does not have monopoly in the generation, transmission and distribution of electricity. It is required to obtain licenses for all of them, and does not have any special rights to hold attractive sites for long. Currently, only about a third of the construction licenses issued by the government are held by NEA. The new MD’s effort should be focused on strategically acquiring licenses for good hydropower projects whose construction would improve NEA’s financial prospects. But NEA should take care not to clash with Independent Power Producers, who are always to be supported and encouraged. New NEA leadership should encourage the IPPs by creating progressive power purchase agreements, so that we are not reduced to operating diesel plants at the cost of Rs. 30 per unit.

    NEA’s image among its consumers has not been very good due to various reasons, like prolonged load shedding hours (presently about 10 hours a day) which is projected to worsen as the dry season progresses. Its image has also been tarnished by the organization’s lackadaisical efforts in the reduction of electricity loss, which is about 27 percent of the supplied power, according to NEA’s annual reports. With the previous experience of handling the loss-reduction drive and as the General Manager of Distribution and Consumer Services in NEA, the new MD should be able to win the confidence of consumers by streamlining operations, providing quality power supply and implementing effective corruption control mechanisms in procurement, construction, operation and maintenance works. It should also leave no stones unturned to reduce the severity of load-shedding, including transmission line construction and power import from India.

    The author (PRABAL ADHIKARI) is an Electrical Engineer

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    Source : Republica