The
fiscal year 2071/72 is over and the financial statements from various companies
are arriving every day.
Public Enterprises (PE) have made a
staggering loss. With no surprise, Nepal Electricity Authority (NEA) and Nepal
Oil Corporation (NOC) top the list of losers.
The state-owned power utility incurred a
loss of Rs. 6.51 billion in the last fiscal year. With this, its accumulated
losses have reached to Rs. 26.79 billion.
Just to remind you that Government of
Nepal had written off Rs. 27.53 billion in the fiscal year of 2010/11.
It looks like there is no sign of
improvement. Instead, the NEA’s financial health keeps on deteriorating every
year.
Experts are demanding NEA to make it
“free from politics”. The political intervention and political appointments
have weakened the financial health. No one can deny this fact.
However, political parties do not care
as long as they can milk it although they are aware of the consequence that
arises from political intervention/appointments.
A positive mindset from all the
political parties is required if we seriously want to do something.
Every now and then, NEA is demanding to
implement an automatic tariff revision system. The last increment of 20 percent
for the first time in 11 years was in June, 2011.
Tariff increment may be a "quick
fix" but it is not the only solution. Also, it will be unfair to put an additional burden to general public for NEA's mistakes, its mis-management and government's bankrupt vision.
To make NEA sustainable, we have to
identify the root causes for its poor financial health. Please view Unbundling of NEA is necessary Although
I wrote this blogpost a year ago, it is still relevant.
NEA can turn
the table around if it manages to solve the mentioned in the blogpost.
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