For a country accustomed to seeing its power utility company mostly in the red, the record growth in profits during the last fiscal year is indeed startling. The state-owned Nepal Electricity Authority (NEA) has projected a profit of Rs 16.09 billion for fiscal 2021-22 which ended in mid-July, a whopping 164 per cent increase compared to the previous fiscal year, when it made a net profit of Rs 6.10 billion. According to its Executive Director Kul Man Ghising, NEA's annual income exceeded Rs 1 billion, making it the topmost public institution in terms of earnings and profit-making. Ghising attributes the profit growth to increase in energy consumption by 27 per cent, increased power generation by 16 per cent from NEA's power plants as well as increase in sales income and power exports. At the same time, electricity leakage was minimised while expenses were effectively controlled.

Things started looking up at NEA with the appointment of Ghising as its executive director in September 2016. Until then, power outages lasting upto 20 hours a day were a common feature in the country, hurting businesses and forcing people to switch to alternative sources of power such as inverters. Unable to balance demand and supply, the NEA in 2013- 14 had suffered a loss of Rs 3.4 billion, which climbed to Rs 8.89 billion in 2015-16. But since fiscal 2016-17, NEA has been making steady profits. Although profits have been increasing over the years, NEA has, however, not been able to expand the necessary infrastructure as targeted, in particular the construction of transmission lines, to provide reliable power supply. Also the goal of providing electricity access to 96 per cent of the people has not been met.

A factor contributing to the increase in profits last fiscal was power exports to India. Currently, about 364-400 MW of excess power generated in Nepal is being exported to India on a daily basis. NEA earned Rs 3.38 billion by exporting 49.3 million units of excess power during the review period though the Indian energy exchange market, compared to just 40.4 million units the previous year. On the other hand, power import from India has declined and is expected to stop from the current fiscal year. NEA also earned Rs 2 billion more by controlling power leakage, which is now down to 15.38 per cent from 17.18 per cent the previous year. Controlling power leakage is as good as generating new power plant, and one can well imagine the amount of revenue this will generate if it can be brought down drastically. This is feasible, given that power leakage was as high as 25.78 per cent just seven years ago. With increased income and profits, NEA must now invest in expanding the needed infrastructure, such as constructing and upgrading the transmission lines, substations and transformers, to improve power supply. Since most of our hydropower plants are of run-of-the-river type, electricity generation is down to a third during the winter months when the water flow in the rivers is drastically reduced. NEA should thus give priority to reservoir type hydroelectricity plants as well as other renewables like solar and wind power, not only to meet Nepal's needs but also to export power to neighbouring countries round the year.

Risky settlement

As many as 880 houses or huts built by landless squatters along the banks of the Manohara River in Madhyapur-Thimi Municipality were inundated after the swollen river gushed into the unplanned settlement Wednesday night. The local authorities said the flood victims need food and accommodation as they lost everything that they had in the flood. The entire settlement is at risk of being swept away when there is a heavy downpour during the rainy season as the river banks are not suitable for housing.

This is not the first time that the flooded river has inundated a squatter settlement. These settlements used to be submerged by the floods in the past as well. The banks of the Manohara, Bagmati and Hanumante rivers have suffered the most as a result of illegal human encroachment. The government also finds it difficult to manage the exodus of landless people into the already heavily-populated Kathmandu Valley. Such people come to the valley and erect makeshifts on the river banks as they can easily find manual jobs for their survival. Providing housing facility to those people in safer locations is easier said than done. The government has built some low-cost housing units for them. But they are not enough to accommodate all of them.

A version of this article appears in the print on August 12, 2022 of The Himalayan Times.