Wired in problems



    KATHMANDU: Transmission lines play a major role in the development of electricity. It is also largely considered as an area of natural monopoly all over the world. Like in most countries around the world, the right to construct transmission lines lie practically within the monopoly domains of Nepal Electricity Authority (NEA), which is a public utility company. After having been formed in 1984 post

    the merger of Electricity Department, Electricity Development Board and Nepal Electricity Corporation, NEA had complete monopoly over all three areas of electricity, namely, generation, transmission and distribution up until 1992.

    The Electricity Act 1992 opened up the sector for private players in generation. That led to the generation of more than 230 MW

    of electricity. Additionally, hydropower projects undertaken by independent power producers with the capacity of more than 1586 MW are

    in different stages of development. Most of the construction, however, has been halted due to transmission related problems, project infeasibility, and social or environmental issues. It is difficult to close those projects financially until there is certainty of transmission lines.

    Power obstacles 

    Lack of timely construction of transmission infrastructure has created hindrances in hydropower development. Construction of Khimti-Dhalkebar Corridor was supposed to be completed by 2010 but construction is incomplete till date.

    The people of Sindhulimadi agreed to give land to the project if they were given 100 per cent compensation. Thankot-Chapagaun Corridor has been under construction for more than a decade. Similarly, Mai Khola Hydropower and Sipring Khola Hydropower, two power projects backed by independent power developers are about to start generation but construction of transmission infrastructure has fallen behind schedule putting these projects’ future operation in quandary. It is believed that electricity which will be generated from Upper Tamakoshi but the ability to bring the produced electricity to the capital city is questionable due to delays in construction of transmission lines that run from Bhaktapur to Matatirtha via Harisiddhi. The electricity generated from sister organisations of Chilime will face the same fate in the future.

    The congestion in the existing grids add further woe to the situation as available power cannot be transmitted due to the problem of tripping. There is congestion in various transmission systems namely Bardaghat-Bharatpur, Marsyangdi-Siuchatar, Khimti-Bhaktapur, and Marsyangdi-Kathmandu. The congestion may lead to a system collapse in any of the transmission lines.

    In Bhairahawa, expensive machines used for industrial production were damaged due to the tripping problem. The same problem has been experienced in certain areas of the Kathmandu valley repeatedly due to excessive load hardly supported by distribution network. It is further aggravated by use of older transmission lines that are in poor condition and no longer reliable.

    Unclear policies

    Despite this serious urgency, NEA has been unable to construct transmission lines due to problems in land acquisition. It takes a long time to get clearances from the Ministry of Forest for the construction of transmission lines in forest, national parks and conservation areas. As a compensatory measure, for every single tree that is cut down, the project has to plant 25 trees in case of protected species, and for common species only two trees need to be planted. Likewise, the process of land acquisition is very cumbersome because affected people demand 100 per cent compensation with ownership right to land.

    However, the Land Acquisition Act ensures only 10 per cent as compensation. Additionally, Rule 88 of Electricity Regulation, 1993 made a provision for the formation of a Compensation Fixation Committee to provide compensation in lump sum to people whose land was used for construction of transmission lines, but the provision does not mention the percentage of compensation. Such ambiguity gives spaces to local people to make their own demands in terms of compensation and in most cases it ends up in the form of obstruction to the construction of transmission lines.

    Such disturbances increase the gap between project identification and project construction time. As a result, new human settlement, housing plots and additional structures develop in the area which lead into remapping of transmission route. It leads to further delays in implementation of a transmission project. Having faced all these hurdles, India has promulgated a new Act that gives compensation of upto four times the real market value of land giving people a sense of not being cheated.

    In addition to this, Public Procurement Act, 2007 was promulgated with the intention of making procedures, processes and decisions relating to public procurement open, transparent, and reliable to promote competition, fairness and accountability in public procurement process. However, the tendency to follow the law to the letter rather than the spirit has handicapped decision-making in public institutions. The Act allows discretionary decision-making to chiefs of public enterprises only up or equal to Rs 100,000. Any decision involving higher amounts have to go through a lengthy process as described in the Act. In addition to this, according to the Public Procurement Act, construction of transmission lines should be awarded to the party with the lowest bid.

    However, there have been many instances where parties have bid an amount too low to get the project contract. After winning the contract, they have been found to raise their claims later resulting in higher costs and thus delays in construction of transmission lines. Therefore, contracts should be given to those parties whose cost is 10 per cent above or below the estimated cost under Engineering, Procurement and construction (EPC) system. Only then, will a new ray of hope be ushered in the development of transmission lines.

    The author is a research associate at Samriddhi, The Prosperity Foundation and can be reached at pramod@samriddhi.org. Samriddhi, is an independent research and educational public policy institute based in Kathmandu.

    For more information, visit samriddhi.org

    Source : The Himalayan Times