Over a dozen hydropower companies not paying government royalty

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    KATHMANDU, Sept 17: Over a dozen independent power producers have not paid royalty to the government, according to the Department of Electricity Development (DoED).

    Except few amongst them who were affected by earthquake and flood, all have been earning good revenues by selling their electricity to Nepal Electricity Authority. But they have not been paying royalty to the government for using natural resources although the DoED has repeatedly asked them to pay.

    Companies not paying royalty to the government on time are running the plants of less than 10 MW, according to the DoED’s record. The outstanding royalty collection is of the last two fiscal years and the DoED record says the amount of the fiscal year 2016/17 is not calculated because they have not submitted record of electricity sales while the outstanding dues of the previous fiscal year of 2015/16 is in the tune of Rs 37 million.

    Bhairabkunda and Sipring Khola projects were affected by earthquake. They have already been restored.

    A total of 14 companies not paying royalty of the last fiscal year ending mid-July are Himal Dolakha Hydropower Company (Mai Khola 4.5 MW), Daraudi Kalika Hydro Pvt Ltd (Daraudi -A of 6 MW, Sanvi Energy Pvt. Ltd (Jogmai Khola of 7.6 MW) among others. The full list is given in the table.

    Amongst those companies Bhairabkunda, Sipring Khola was damaged by the earthquake of 2015.

    They pay the royalty to the government in two categories. They pay two percent of the average tariff per unit (per kilowatt hour) and Rs 100 per kilowatt installed capacity per year for the first 15 years of generation (for commercial purpose). Thereafter, the rate of royalty is set at 10 percent of average tariff per unit (per kilowatt hour) and Rs 1,000 for each installed kilowatt per year.

    The companies have to submit their royalty in every four months but several of them have remained out of contact for two years. The deadlines to pay royalty are; Kartik 15 or October end for the royalty of months of Ashad, Shrawan, Bhadra, Ashwin and, Falgun 15 or February end for the royalty of Kartik, Mangsir, Push  and Magh, and Ashad 15 or June end for the remaining four months or Falgun, Chaitra, Baishakh and Jestha.

    “We have followed up with them repeatedly but they have not been paying in given time and we continue to follow up if they do not obey our follow up and lastly we write to Nepal Electricity Authority, which is the only electricity buyer of the government, to ensure the royalty,” said Nabin Raj Singh, Director General of DoED.

    Nine companies including Synergy Power Development Limited (which runs Sipring Khola of 10 MW), Himal Dolakha Hydropower Limited (Mai Khola of 4.5), Ankhu Jalvidut Co. Pvt Ltd which runs (Ankhu Hydropower Project) have not cleared the dues of the previous fiscal year.

    DoED last year had corresponded to Nepal Electricity Authority to ask the companies to pay dues or royalty to 12 companies including those nine but only three companies paid the dues. NEA is the only buyer of the electricity from these independent power producers.

    Talking to Republica, Sujan Paudel, account chief of Synergy Power Development Limited, claimed that they have almost cleared the royalty of the fiscal year of 2015/16 and promised to pay soon of the last fiscal year or 2016/17.

    The DoED has collected Rs 1.43 billion as royalty from different hydropower companies including that of Nepal Electricity Authority in Fiscal Year 2016/17 while the amount collected was Rs 1.57 billion in the previous fiscal year.

    This royalty is partly distributed to the project affected local levels (5 percent) and provinces (10 percent) and remaining goes to the central government, according to the proposed draft laws for distributing the royalty after the local level is elected.

    Source: My Republica