The provisional annual financial report revealed on the occasion of its 26th anniversary Tuesday stated the sorry financial status of the state electricity distribution monopoly. "We managed to cut down the loss by controlling expenses on maintenance and overtime to staff, and bringing down the leakages," Secretary at the Ministry of Energy and Chairman of the NEA board Balananda Poudel said.[break]
The provisional report stated that the peak demand of the last year was 946.10 MW on January 28. Similarly the report projects the peak demand to rise to 967.10 MW next year, 1,387.20 MW five years later, 2,052 MW 10 years later and 2,951 MW 15 years later.
The report revealed that the total revenue of NEA rose by Rs 841.31 million to Rs 19,576.93 million during the period while the number of consumers rose by 189,192 to 2,053,259.
Speaking at the formal function to celebrate the 26th anniversary, Energy Minister Gokarna Bista urged everybody to not be over-critical of NEA´s recent past and instead focus to take it to glory in the future. Comparing the NEA with a drinking water project, Minister Bista said dirty politics made the whole system dirty. He nevertheless urged the NEA staff to try on their part to clean the system.
"We have already initiated the process to clean the system by making Energy Secretary the chairman of NEA board to curb political intervention. I believe we can neutralize the accumulated loss of Rs 27 billion within two years if we move forward with the right plan and willpower," Bista said.
Addressing the gathering chairman Poudel declared the upcoming year to be the year of financial restructuring, austerity, managerial reforms, transparency and reduction of leakages and tariff dues. He also directed the NEA Managing Director Deependra Nath Sharma to take measures to immediately relocate offices of hydropower projects to the respective project sites from Kathmandu.
Secretary Poudel also revealed that NEA has already sent a proposal of financial restructuring to the Ministry of Finance and claimed NEA would review tariff, which has not been raised in the past 10 years, next year if the institution reformed itself to create moral ground to raise tariffs.
"We hope to raise capitalization to Rs 70 billion from Rs 40 billion and also seek waiver of some of the loans which do nothing other than smear the balance sheet through financial restructuring. We have also urged for reduction of the current interest rate of eight percent on loans obtained from the government," Poudel explained. He also claimed that the Ministry of Finance was charging NEA a higher tax rate than the private power producers and said financial restructuring would address the anomaly.
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