Hike in electricity tariff will hit industrial sector hard: FNCCI

Published On: February 7, 2017 12:30 AM NPT By: Republica  | @RepublicaNepal

NEA has proposed 20 percent hike in electricity tariff
KATHMANDU, Feb 7: The Federation of Nepalese Chamber of Commerce and Industries (FNCCI) has objected to a proposal to raise electricity tariff hike, saying that it will badly affect the country's ailing industrial sector. 

Speaking at an interaction on 'Electricity for Industrial Growth' organized in Kathmandu on Tuesday, FNCCI President Pashupati Murarka said that hike in energy tariff will further erode competitive strength of Nepali industries. 

“If the proposal to hike electricity tariff is endorsed, electricity tariff in Nepal will be higher than the tariff in China and India,” Gyanendra Lal Pradhan, chairperson of Energy Committee under FNCCI, said. “Industrial growth is possible only when electricity tariff is low,” he added.

The private sector leaders were responding to a proposal to increase electricity tariff by 20 percent submitted to Electricity Tariff Fixation Commission (ETFC) by Nepal Electricity Authority (NEA). 

ETFC is the final authority to set energy prices. It had raised electricity tariff by 18 percent seven months ago.

Defending the proposal to hike electricity tariff, Kulman Ghising, managing director of NEA, said the NEA has no other alternative to increasing energy tariff. “The government can announce subsidies to the industrial sector, but we have no other alternative,” he added. Stating that weighted average revenue collection has only increased by 13 percent in the first six months after last year's tariff hike, Ghising said the NEA must recover at least cost of sales by increasing tariff.

Ghising also briefed the gathering about the positive changes that his management has brought. “We have reduced system loss by 1.5 percentage points from 26 percent in the first six months of the current fiscal year. Likewise, Udayapur Cement Industry Ltd managed to achieve 90 percent capacity utilization for the first time in 17 years after we ended power cuts,” Ghising said, adding that the NEA's main focus at present was on increasing production, controlling energy theft and become austere.

Over 1200 MW will be added to system in 3 yrs: Ghising
Kulman Ghising, managing director of Nepal Electricity Authority, has said that an additional 1,200 MW will be connected to the national grid in the next three years. 

Speaking at an interaction on 'Electricity for Industrial Growth' in Kathmandu on Monday, Ghising that said Madhya Bhotekoshi (102 MW) and Upper Tamakoshi (456 MW) will begin generation in the next three years.  

“We won't have much problem in managing peak load after Upper Tamakoshi. But we need to manage demand in dry energy and find market for surplus energy in the off-peak hours,” added Ghising.

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