Cash-strapped Nepal Electricity Authority (NEA) is getting Rs 840 million loan from the Citizen Investment Trust (CIT) after the government guaranteed repayment. The power utility plans to use the loan to pay bills of electricity import from India.
NEA had sought Rs 1.5 billion from CIT, but the government guaranteed only the amount needed to clear the power import bill.
NEA has to pay IRs 520 million to India for electricity import from the eastern part of Nepal. Bihar Electricity Board has been asking NEA to pay the dues at the earliest. “We are receiving the amount equivalent to our import bill,” said NEA Executive Director Dipendra Nath Sharma.
Nepal has been importing 70MW of electricity from Bihar, India. As per the agreement, NEA has to pay Rs 150 million every month through the letter of credit. With NEA importing more than the agreed volume of power from Bihar lately, the dues went on rising. “Now, we have to pay Rs 300 million every month,” said Sharma.
As NEA has already paid Rs 50 million, Sharma said the chances of India cutting off the power supply immediately are slim. Bihar Electricity Board had warned of cutting off the power supply if NEA failed to pay dues.
NEA’s cumulative loss has reached to a whopping Rs 28 billion. It incurred a loss of Rs 6 billion in the last fiscal year alone. As a part of reforms in NEA, the system of energy minister becoming its chairman was recently changed and an executive director was appointed through free competition.
The only power utility of the country is now developing a package of financial restructuring. One of the key components of the measure is hiking electricity tariff. The tariff has not been revised for the last decade. “It is necessary to hike electricity tariff for further reforms,” said Sharma.
Deputy Prime Minster and Finance Minister Bharat Mohan Adhikari, who was also looking after the Engery Ministry, had scraped the electricity charge commission while presenting NEA reform measures in the parliament. “Hiking electricity tariff in absence of the commission makes the reform process difficult,” said Sharma.
NEA has said it recovered Rs 230 million in electricity bill dues from various government offices. Government offices still owe Rs 660 million to NEA in electricity bill dues. The power utility body has been cutting off power lines to those not clearing dues. Likewise, NEA has also taken austerity measures by reducing costs related to directors of NEA including allowance, telephone bills and vehicle costs. It plans to cut down expenses on various committees and sub-committees to be formed in NEA. “We are also planning to sell expensive vehicles,” said Sharma. Top officials of the Energy Ministry and NEA have already announced that they would not take facilities of expensive vehicles.
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