Govt bodies owe Rs 1.18b to NEA

Shashi Dhungel

Kathmandu, April 13:

Various government offices and municipalities owe the Nepal Electricity Authority (NEA), the state-owned power utility, more than Rs 1.18 billion for electricity consumed till the end of fiscal year 2003-04.

Municipalities across the country like Kathmandu, Biratnagar, Pokhara and Birgunj have to pay Rs 860 million followed by Rs 84.6 million by the home ministry and Rs 45 million by the ministry of local development.

“NEA is not making any profit and it can hardly afford such credits. If the situation prevails, we might be compelled to block power supply to municipalities,” said Badri Nath Rokka, deputy director, finance and accounts at NEA.

According to NEA figures, the total credit amount makes nearly 10 per cent of the total annual revenue of Rs 12.5 billion earned by the authority. The amount is large enough to fund a medium-sized hydropower plant in the country.

A secretary-level meeting held in October 2004, has already made a decision that the money owed by municipalities prior to the end of fiscal year 2003-04 would be paid by the ministry of local development (MoLD).

A provision was also made to pay the credit directly to NEA under the local development budget. However, any dues after that date is to be borne by concerned municipalities themselves.

NEA received Rs 110 million from different municipalities till last November. The annual revenue of NEA in the fiscal year 2002-03 was Rs 11.24 billion which increased to Rs 12.12 billion in the fiscal year 2003-04.

Electricity is supplied to municipalities without using metres to ascertain the exact amount of electricity units being consumed. It is charged according to the number of points of usage and the wattage they use. This lacks of actual measurement in power supplied to municipalities, especially to street lamps and illumination in public places, has created a dispute over the over-due amount.

A joint taskforce, with representatives from the ministry of finance, MoLD, NEA and municipalities has now been formed to resolve the issue, informed Rokka.

The large debt by government agencies to NEA comes at a time when it has not reached the break-even point, with more than Rs 4.5 billion alone being spent on purchasing power.

Currently, NEA incurs a huge loss due to ‘leakage of electricity’. Nearly 25 per cent of the total electricity supplied goes waste as ‘leakage’ owing to technical reasons and pilferage.

The low paying capacity of Nepali people and the high tariff rates are the main reasons for power pilferage, said Rokka.

To reduce pilferage, NEA is working on to introduce two tariff rates in the form of a ‘seasonal’ tariff rate and different tariffs for day and night. However, NEA would have to invest a large sum at the beginning to introduce the second type of the rate, he said.