Nepal Electricity Authority (NEA) – running into loses for sixth
consecutive years – reported an accumulated loss of Rs 14.31 billion.
Though, the government had written off its Rs 27 billion
accumulated loss a fiscal year ago, the authority’s financial health does not seem
improving anytime sooner.
The power tariff hike by 20 per cent – to Rs 1.21 per unit – in
the last fiscal year was supposed to plug NEA loss but the state-owned power
utility recorded a loss of Rs 4.56 billion in the last fiscal year 2012-13,
informed the NEA during its 28th anniversary here today. Its net
loss stood at Rs 8.55 billion in the fiscal year 2011-12 and Rs 6.51 billion
2010-11.
Apart from the writing off of the accumulated loss – caused mainly
due to Middle Marsangdi’s time run over – the government had also approved the
power utility’s Financial Restructuring Plan, which seems inadequate to arrest
the loss the NEA is incurring.
The NEA officials, however, claim that they have succeeded in
reducing the loss. “The NEA has succeeded in reducing the loss in the last
fiscal year by almost 50 per cent compared to a fiscal year,” claimed the executive
director of NEA Rameshwor Yadav, addressing the anniversary programme.
The higher production cost compared to the tariff has pushed the
Nepal Electricity Authority to loss, he claimed, adding that the authority has,
however, been able to collect outstanding dues.
But the NEA that is one of the largest loss making public enterprises
(PEs) among the 37 state-run PEs still has to collect around Rs 7.98 billion
outstanding dues – that is almost equivalent to sales revenue of 110 days – by end
of the last fiscal year, according to the NEA annual report. “Of total
receivables, street light dues from different municipalities of the three
consecutive years alone amounted to Rs 1.85 billion.”
Though, increased tariff last August has helped electricity sales up but increased operating expenses have eaten up its revenue pushing it to red zone.
Though, increased tariff last August has helped electricity sales up but increased operating expenses have eaten up its revenue pushing it to red zone.
The loss is also due to increased power import from India, massive
leakages and higher cost of electricity purchase and lower rate of tariff. The
NEA purchased Rs 13.49 billion worth power — that is some 53.82 per cent of the
total operating expenses and 51.49 per cent of its total income – according to
the NEA annual report that revealed Rs 25.07 billion as its total expense in
the last fiscal year.
“The high cost of electricity production and leakages, apart from
lack of financial transparency pushed the authority to the loss,” according to
energy secretary Bishwo Prakash Pandit.
The NEA – that has been in loss since last consecutive six years –
data revealed that some 25.03 per cent electricity leakages were recorded in
the last fiscal year, though the leakage has come down by 1.34 per cent.
Frequent political bickering, trade unionism, lack of transparency
and inefficient management have pushed the state power utility into a deep financially woes hurting the new power projects' development process.
However, NEA has increased its consumer base to 2.59 million by the end of the last fiscal year, the annual report said, adding that household customers are the largest consumers with 95.12 per cent share.
However, NEA has increased its consumer base to 2.59 million by the end of the last fiscal year, the annual report said, adding that household customers are the largest consumers with 95.12 per cent share.
Without mentioning the amount, the annual report also stated that
the NEA’s largest expenses went in maintenance and rehabilitation of power stations
to increase electricity availability and reliability.
Government to attract FDI for
storage type projects
The government is trying to
attract foreign direct investment (FDI) in the storage type projects as neither
NEA nor the state has enough resources for mega projects, said energy secretary
Bishwa Prakash Pandit – one of the NEA board members – during the anniversary
programme. “The country needs to attract FDI also to reduce the load-shedding
hours,” he said, adding that ministry will
encourage large storage type projects attracting FDI. Most of the operating hydropower projects in the country are run-of-the-river type that could not help reduce load-shedding during dry season.
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