New energy minister vows to make NEA profitable

Published On: August 18, 2016 01:20 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU, Aug 18: Newly appointed Minister for Energy Janardan Sharma has vowed to turn Nepal Electricity Authority (NEA) into a profit-making entity.

Addressing the 31st anniversary of NEA in Kathmandu on Wednesday, Sharma, who assumed office recently, also expressed commitment to control leakage, accelerate works of hydropower and transmission line projects, and curb corruption associated with procurements, among others.

The power utility has been piling up losses over the past decade. It posted annual loss of Rs 11.74 billion in 2015/16. The annual loss ballooned from Rs 4.74 billion in 2014/15, mainly due to import of additional 390 million units of electricity from India, according to NEA officials.

NEA has been suffering loss of Rs 3 per unit in distribution of electricity imported from the southern neighbor. The power utility had increased power imports from India after generation of its plant fell drastically due to poor monsoon and energy demand increased significantly due to blockade.

Sharma also accused NEA officials of wasting energy generated by domestic plants and import power from India.

The minister seemed to be unaware of the plan to increase energy imports from India as part of the 10-year Electricity Development Plan unveiled in February.

At the program, Minister Sharma also directed Energy Secretary Suman Sharma and NEA Managing Director Mukesh Raj Kafle to submit progress report of sick projects regularly.

NEA's under construction projects like Chameliya, Kulekhani III and Upper Trishuli 3A have remained near to idle in the past fiscal year.

Minister Sharma also indicated that he was in favor of unbundling NEA into different units even though NEA's employees have resisted the reform initiatives. The energy ministry has already started unbundling process.

NEA has around 11,000 staffers.

Sharma also hinted that he would be strict toward independent power producers (IPPs). “The ministry will terminate Power Purchase Agreements (PPAs) of such companies which have not made progress in project site,” he added.

He also said the ministry should not stop signing PPA with IPPs as there is a huge demand for electricity in the market.

'Cut power supply to defaulting consumers'
Energy Minister Janardan Sharma has directed officials of Nepal Electricity Authority (NEA) to cut power supply to top ten consumers in terms of outstanding dues within three days.

Sharma has announced different reform measures to improve financial health of the power utility. He also directed the NEA management to provide electricity meters to discourage electricity theft at the earliest.

NEA's system loss increased to 25.78 percent in the last fiscal year compared to 24.44 percent of the previous year.

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