General Manager Richard Austin and Finance and Administration Manager Kelvyn R Palmer, who along with Technical and Operational Manager Josef Ehrmann faced the media for the first time since taking over the management last April at a media interaction Sunday, said that the commission fixed the tariffs unilaterally without even consulting the management.
The commission had proposed to raise the minimum tariff for the lowest segment (10,000 liters or less per month) to Rs 55 from Rs 50 that was fixed in 2004. But the commission lowered it to Rs 27.50 lowering the cap to 5,000 liters or less through a decision on January 8.
“We had only proposed a 10% hike on the tariff that had not been adjusted since 2004 though the inflation has gone up by 30.73% in the period according to the central bank. And yet they have brought it down significantly without even consulting us,” Finance and Administration Manager Palmer said at the interaction where the manager trio briefed the media about the present status of KUKL and their future plans.
“We are already in loss and they have decided to further reduce the tariff for the segment that contributes for the majority of the revenue. It is like selling goods at a much lower price than the production cost and we will ultimately go bankrupt,” General Manager Austin reasoned.
KUKL has now decided to lodge an appeal with the Ministry of Physical Planning and Works (MPPW) to review the decision. “The law (KUKL’s) say that if we are not satisfied (with tariffs), we have the right to lodge an appeal (within 30 days) with the MPPW which then can set up an independent judicial inquiry to look into the matter,” Austin said.
The TFC, on the other hand, was adamant that it has done nothing wrong. “We have just halved the lowest cap to 5,000 liters from the existing 10,000 liters and proportionally halved the tariff from their suggested level of Rs 55 to Rs 27.5. We have not even touched the 10,000 liters segment and kept tariff for that segment at Rs 55 only,” Ratna Sansar Shrestha, a member of the three-member TFC, argued.
But KUKL refused to buy Shrestha’s argument. “They have not explained their logic in doing so. And they are doing this all without knowing our tariff structure,” Austin reacted.
Shrestha, however, welcomed KUKL’s plan to lodge an appeal. “It (the appeal) will be good for the people. We had not done a public hearing while fixing tariffs as the law did not require us to do so. But the appeals commission to be headed by a sitting Supreme Court judge will set up a public hearing which will be a first of its kind in history,” Shrestha looked forward in anticipation.
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