Joint Secretary at MOE Rajendra Chhetri said the ministry has already prepared regulations, and memorandum of association and article of association for the company and sent it to the Ministry of Finance after the cabinet gave a go ahead for the company around five months ago when Gokarna Bista was energy minister.[break]
“We will register the company at the Office of Company Registrar according to the Company Act 2063 as soon as the file returns from the Finance Ministry,” Joint Secretary Chhetri said. There was general consensus that NEA was not able to do justice to any of its three-pronged obligation and needed to focus on just a single duty of distribution for efficiency.
"We believe that NEA has not been able to prioritize transmission and are preparing to form a separate specialized company for transmission," Chhetri added.
The government has also recently approved the Financial Restructuring Plan to give a new lease of life to the financially teetering state utility. The government has decided to write off the accumulated loss of around Rs 27.53 billion that has disfigured the NEA balance sheet and also agreed to raise NEA´s authorized capital to Rs 50 billion from existing Rs 30 billion.
The Financial Restructuring Plan also recommends other financial changes including the dealing between NEA and the Finance Ministry to make the utility efficient.
“We had already started unbundling of NEA by forming sister companies for construction of Chilme, Upper Tamakoshi and other projects. The formation of NGC will expedite the unbundling process,” Chhetri revealed.
NGC will construct the new transmission line projects and gradually take the existing transmission lines and the load dispatch center owned by NEA under its control.
The Ministry of Forests and Soil Conservation, Ministry of Environment, security agencies and other stakeholders will also have shares in the company along with the MOE to give all the stakeholders a sense of ownership.
Construction of transmission lines have repeatedly been halted due to lack of coordination with the forests and environment ministries and security problems in some cases. NEA also will have share in the NGC, Chhetri said, to ensure that NEA doesn´t treat the new company as a rival entity.
“NGC will be non-discriminatory in its dealings with power producers and will give access to all producers levying wheeling charge for the transmission. It will also formulate grid code and operation code which obviously have to be endorsed by a regulatory commission,” Chhetri explained about the new company.
He revealed that the authorized capital of NGC is proposed at Rs 25 billion but said the Finance Ministry will have the last say.
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