Jan 30, 2017- Energy Minister Janardan Sharma has been the talk of town lately because of his initiation to reform the Nepal Electricity Authority (NEA) and free the Capital from load shedding, while minimising power outages throughout the country. Many people have led the ministry in the past, but hardly anyone has made the kind of impact on the energy sector that Sharma has within a short span of six months as a minister. Bibek Subedi spoke to Sharma about his initiative, private and foreign investment in the hydropower sector, the losses that the NEA has been sustaining, malpractices in the NEA and the recent cross-border guideline issued by India.
Although major cities like Kathmandu and Pokhara have been made load shedding free, there is still an energy deficit of around 400 mega watts in the country. How do you think the deficit can be plugged?
Load shedding has been a perennial problem for the country and we are determined to end it. To this end, we have started a campaign ‘Ujyalo Nepal Abhiyaan’, through which we are already taking necessary steps like carrying out maintenance work on our distribution system and preparing a proper energy production schedule, among others.
The government and the public have to prioritise hydropower development. Through the ‘Ujyalo Nepal Abhiyaan’, we also plan to encourage the private sector to invest in hydroelectricity development. We are hoping that by the end of this monsoon, the whole country will be free of power cuts. Although ending power cuts throughout the country is a tall order, it is not impossible. We need to be positive and make maximum effort.
People are worried that once you leave the ministry, the efforts made so far might go to waste if the next minister does not build on the progress. How justified are such worries?
There have been some developments in recent times that will advance our energy sector for years to come. Quite a few companies—such as power generation, grid, electricity trading, hydroelectricity investment and development, engineering companies—have been established or are in the process of being established. This will tremendously help our hydro sector.
I cannot take all the credit for the progress we have made so far in the sector. It is a result of the contributions of many people from my ministry and other concerned bodies, as well as the general public. Nepali people are now well aware of the decisions we have made and the problems that the power sector has been facing, so I am sure they will hold those accountable who try to obstruct the growth of the sector.
Although you have prioritised public funding of hydro projects, people are hesitant to invest in them due to slow or low returns. How would you convince people to invest in hydropower?
It is true that people have reservations about investing in hydropower. Nepal’s development has long been held back due to power shortages. People should realise that although returns from investments in hydropower might be slow or low, it is a crucial investment for our nation’s future. Adequate power generation will boost our industrial growth, help different sectors of the country like tourism and generate jobs.
Moreover, the government will ensure that people will not have to invest in expensive projects with low returns; the government will spend on such projects. In addition, we have started developing stricter policies on hydropower development. Private investors will no longer be allowed to take their sweet time. We are planning to put in place strict rules regarding the time frames so that hydropower projects can be completed on time.
The NEA has been incurring huge losses over the years. Are there specific plans to make it perform better?
I vowed to make the NEA a profit-making entity as soon as I took office, and I am making maximum effort to this end. It is pitiable and surprising that the NEA has performed so poorly over the years despite its monopoly on the power sector. But we are working on finding and correcting the problems that plague the authority. As you must have noticed, we are already making drastic changes in the authority to deal with the problems.
Why haven’t the NEA’s hydropower projects finished on time? Who do you hold responsible for it?
There might have been some mistakes at the individual level in the NEA, but the overall responsibility falls on the leadership. The mentality of working for personal gain has a large part to play for the delay in the hydropower projects. But we are making efforts to correct past mistakes. We are planning to adopt a company model for the NEA so that we can assess its work better.
However, it is quiet impractical to expect one body to take the whole responsibility of power generation, especially given the country’s huge potential. I think unbundling the NEA is also important. The companies I mentioned earlier are essential for our power sector to grow and realise its potential. For instance, if a power generation company is established, it will make the market competitive and push the NEA to perform better as well.
We are nowhere close to fulfilling our potential and we know that it cannot happen without foreign investment. Why are most of the foreign funded projects being constantly delayed? Is it due to negligence on our part or are we not getting good investors?
It is both. On the one hand, have been signing agreements with unrealistic targets and then failing to meet them. In addition, there are problems in our structure and working style; there are various political interests at play, which lead to inefficiency. On the other hand, with regard to investors, I would say some are good and some are not. They also come here to fulfil their self-interests. They look for ways to make the projects costlier and to profit out of them with little regard for our development. This hurts our interest.
However, these are things of the past, and I can only talk about the present and the future. Though we need foreign investment, the government needs to accord greater priority to the Nepali public. Second, the Nepal government needs to take loans and take full responsibility for them. Third, we need to attract good foreign investors and work closely with them.
While bringing in foreign investors, we need to clearly mention the things that would be given to them at the very outset. And if we can provide those things on time, it will create an investment friendly environment. This has been happening; as a result, investors are coming in on a daily basis to understand the procedures. So the conditions are improving. However, there are concerns about where to sell the electricity that is generated. The solution is not to sell the power, but to consume it domestically. We need to estimate our per capita consumption, improve it and then only sell power if there is a surplus. Uncertainty about where we will sell our electricity has been acting as a disincentive for investors and hindering our hydropower development for a long time.
What are your thoughts on the recent cross-border guideline that India has issued?
The agreement we have with India—which is a bilateral agreement—is the Power Trade Agreement. What India has issued without consulting us is their internal matter and not our concern. Bilaterally, we have the PTA in place which will form the basis of our dialogue with India. We should concern ourselves with official documents and agreements, not with things that are unofficial. Second, it is worth repeating that we should start looking into ways to consume the power we generate for domestic purposes instead of selling it. So the guideline will not affect us in anyway, and we should not concern ourselves with it.
Finally, what is your opinion about the recent scandal about power leakage and the transfer of 2,500 NEA staff?
The leakage and transfers are different matters, so please do not put them together. Transfers are a part of the job and have been carried out officially the way they are supposed to. They are not related to the irregularities. Their purpose is to keep the staff motivated. Staying in one place for a long time erodes the energy level of the employees and, at the same time, allows different forces with vested interests to play. There was public demand for it as well. As for the malpractice, we are dealing with it, as result of which we are in a better state now in terms of electricity.
Source: The Kathmandu Post