The public utilities and those public enterprises enjoying monopoly in Nepal are in a unique position. When they start making losses from whatever causes they take the easiest way out — hike the prices of their services. They do not have to consider such questions as their rivals’ prices and their chances of surviving competition. But it is the ultimate consumers who always bear the brunt of such hikes. At present, the Nepal Electricity Authority (NEA) is seeking to raise the power tariff by eight to ten per cent. NEA has accordingly forwarded a proposal to the Electricity Tariff Fixation Commission, which had, not long ago, rejected its bid to introduce seasonal tariff. The justification being given for the proposed hike is to cover NEA’s mounting expenses.
Unless concrete efforts are taken to make NEA efficient and effective, such tariff hikes will continue to become necessary from time to time to make up for the inefficiency and wrong practices of the management, to pay for the avoidable part of power leakage and pilferage, as well as for the wanton waste of financial and other resources, and to offset the huge increase in costs caused by the huge amounts of undue commissions and graft involved in NEA’s transactions in which politicians, bureaucrats and the water mafia are mainly involved. On the other hand, NEA has been unable to collect its dues properly, which now stand at Rs. four billion. Often, successive governments have not cared much to bring in competent, financially clean and professional teams to run this highly important organisation.
Besides, those in power do not hesitate to hire for NEA’s top executive position a junior person or one who is not otherwise fit for the job or one who combines both disqualifications. For example, NEA’s new managing director is a mere under-secretary-level engineer with the Department of Roads, while the incumbent was removed without assigning any reason. Among other things, this is bound to lower the morale of senior people at NEA. As for the proposed hikes, Nepalis already have the distinction of paying the highest rate in South Asia. By and large, the government cannot be expected to subsidise electricity services. But it is even more important that the general people are not made to subsidise the inefficiency, incompetence and corruption of those who run or control NEA. First, cost-cutting and efficiency-boosting measures should be effectively put into practice.