ETFC has frequently been missing proposed deadlines for the hike as the government has not been able to fully assure the former that dilapidated condition of Nepal Electricity Authority (NEA) will improve after such a hike. NEA has proposed ETFC to hike electricity tariff by 30 percent. [break]
According to ETFC Chairman Mahendra Nath Aryal, NEA has submitted action plan that overtly underline its commitments to gradually bring down electricity leakage and load shedding hours, which forms major conditions of the hike.
"Though NEA has proposed actions plan for reforms, we are seeking ownership of such a proposal from Ministry of Energy and Finance," he said.
The EFTC has sought accountability of NEA´s commitments from "permanent" government institutions taking into consideration that with the change in government, NEA´s top officials are sure to be reshuffled. Without MoE´s and MoF´s assurance to the action plans, the question of accountability might come to the fore.
Aryal added, "Though we have received positive nod from MoE, we are still awaiting response from the MoF."
An official at the MoF admitted to receiving such a request from ETFC.
"The ministry is likely to be a witness to NEA´s action plans," the official said on conditions of anonymity. "However, the ministry is mulling over future situation that might warrant pouring of funds to materialize the action plans. If it happens, MoF might have to incur additional financial burden."
However, Aryal was of the opinion that revenues collected from the increased tariff will go into the state coffers; and therefore, MoF should take interest to ratify NEA´s commitments.
Despite being the state monopoly, NEA is incurring a whopping loss every year. In fiscal year 2009/10 alone, NEA incurred a loss of Rs 5.35 billion. A major contributor to this loss is electricity leakage, which stands approximately at 25 percent. Out of this, NEA claims that 17 percent is technical loss and 8 percent is electricity pilferage.
While pilferage could be capped by taking stringent actions against the guilty party, NEA has to make huge investments to bring down the technical loss by replacing its age-old infrastructures.
NEA has estimated that load shedding hours may go up to 14 hours beginning November this year. At present, hydro projects under operation have installation capacity of about 630 MW. However, owing to much lesser electricity generation due to inadequate water levels in reservoirs and defects in turbines, people have been bearing the brunt of extended load shedding hours.
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