Kulman shows profit on paper as he goes: Debt burden of Rs. 32 billion

Kathmandu; In the last four years, the discussion and popularity of the Nepal Electricity Authority has skyrocketed.  The only reason for this was the arrival of Kulman Ghising in the leadership and the increment in the company’s profits by ending the load shedding.

The scales of the future will surely analyze what Ghising did during his tenure from 29 Bhadra, 2073 BS to 28 Bhadra, 2077 BS. But, there are clear indications that some of things he has done or failed to do will have a long- term effect on the organization.

Not being able to collect the tariff of trunk and dedicated line became the worst thing during his tenure. NEA has informed that the tariff to be collected from trunk and dedicated line is Rs. 15.01 billion till last Baishakh. It has been claimed that such amount has reached around Rs. 16 billion by Jesth and Ashad.

The Electricity Regulatory Commission (ERC) has decided to remove the rate for trunks and dedicated tariffs by setting new tariffs with effect from the current fiscal year. Since then, industrialists have not had to listen the words ‘trunk’ and ‘dedicated’. But, where will the financial graph of NEA’s profit go with the nearly Rs. 16 billion that has been accumulated for a long time, not paid by the industries and not collected by NEA?

The industrialists have been stating for a long time that such tariff cannot be paid saying that the authority has done the billing illegally. NEA was preparing to give the discount at that time (initial phase of Kulman’s tenure), but later changed the voice suddenly and said that the amount will be collected. As the issue became more contentious, the government formed a high-level committee.

The committee was formed under the leadership of Energy Secretary Dinesh Kumar Ghimire with the coordination of the then Finance Minister Yubaraj Khatiwada, Energy, Water, Resources and Irrigation Minister Barshaman Pun and Industry and Commerce Supplies Minister Lekharaj Bhatta. The committee submitted its report to the government on 19^th Shrawan.

Deciding on the report, the Cabinet gave the responsibility of its implementation to the Ministry of Energy on 22 Shrawan. Five months have passed since the decision of the Cabinet. But, it has not been decided yet whether the tariff will be collected or not, or whether the industrialists will pay or not. It has not been decided how much the industrialists should pay.

The amount is the income after coming directly or indirectly in the financial records of NEA. Ghising also showed a profit on paper based on the same amount. But, today there is a high probability that such a large amount will not be collected.

Today, Ghising is not in the leadership of the NEA. He left after removing the darkness from the country and showing the NEA a profit of billions of rupees on paper. The same profit figure has now become a major headache for the NEA leadership. This seems to have laid the foundation for the long-term loss of the organization.

The Ministry had again directed the NEA and the Electricity Regulatory Commission (ERC) to implement the urgent decision of the Cabinet. The ERC does not seem to have done anything about it so far. Ram Prasad Dhital, the spokesperson of the ERC said that all the members are studying the issue further. “The commission is sensitive about the revenue of the authority, we will make a decision soon”, he said. The Ghimire Committee focused that such tariff disputes should be resolved by dividing into three sections.

Regarding the tariff from Shrawan to Poush, 2072 BS, the committee had recommended to implement the decision of the then Appellate Court on Shivam cement. The court had ruled that Shivam cement should not have to pay additional tariff on trunks and dedicated lines.

Similarly, in the case of tariff from 1^st Magh, 2072 BS to Baishakh, 2075 BS (period until end of load shedding), the authority had been suggested to collect the tariff even in installments from the industrialists. Likewise, regarding the tariff from Jestha, 2075 to Ashad, 2077 BS, it is mentioned that it will be implemented as per the decision of the Commission.

The only tariff for the load shedding period (from Magh, 2072 BS to Baishakh, 2075 BS) is around Rs.7 billion.  Similarly, the additional revenue of trunk and dedicated line after the end of load shedding is around Rs. 9 billion. Lekhnath Koirala, Deputy Managing Director of NEA’s Finance Directorate, said that all these funds have been recorded to the accumulated income.

‘The issue of how to collect the tariff after the end of load shedding has not been decided by the ERC, it is still under consideration’, he told to Urja Khabar, ‘on the other hand, NEA has not even started the process of collecting the tariff.’

If the Rs. 16 billion that has already tied up in the financial records is not collected, this amount is a direct loss to the NEA. Moreover, the NEA has to deposit another Rs. 16 billion from the accumulated fund or by earning to cover the loss. This seems to add Rs. 32 billion debt sum to the NEA’s side at a time.

Kulman has shown the organization a profit of about Rs. 25 billion during his tenure of four years. He has not collected or taken an initiative to collect Rs. 16 billion in the same period, which is considered bad faith. The same amount of Rs. 16 billion is likely to cause a loss of Rs.32 billion to the organization.

In addition, the government has announced a 25 percent discount for consumers consuming up to 150 units of electricity during the lockdown period between Charitra, 2076 and Jestha, 2077. As announced by the government, the discounted amount had to be provided as grant to the NEA. But, the government instructed to bear that sum from the NEA’s fund.

However, as the NEA has incurred an additional burden of around Rs.3 billion during the period in discount, the demand has been made to the Ministry of Finance.  Koirala said that no response has been received so far.