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Kathmandu Saturday March 31, 2001 Chaitra 18, 2057.
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Tariff hike again ?
Electricity here is costly. Agreed. But incompetence, miscalculations and low
bargaining power make it even costlier. As if the existing electricity tariff is not high
enough, plans are afoot to impose additional charges on customers. The Nepal Electricity
Authority (NEA) is making frantic efforts to endorse its proposal for another electricity
price hike before an Asia Development Bank deadline expires. Otherwise, the giant lending
agency would pull out its support from a number of development projects. This kind of
persuasion, to put it euphemistically, is nothing new. It is pure de javu. Many a time in
the past, the public utility authorities have treated the public to similar logic. Over
the last ten years alone, the electricity tariff has skyrocketed by a staggering 270
percent, a rate that in other countries might spark off civil unrest. But here the case is
entirely different. Such an exorbitant hike could only raise eyebrows. This does not seem
to be a worthy enough reason to protest. It was only last year, the government raised the
electricity charge by 30 percent. And if this yearly custom makes it to the cabinet,
consumers will be compelled to pay 20 percent more than they are paying now. Such a double
digit hike is plainly unjustifiable in one of the world’s poorest countries. In a
country, where more than one fifth of the population still gropes in darkness, and where a
handful of experts strike shady deals with donor agencies, trampling down the much-hyped
mantra of transparency, the hapless consumers seem to have no option but to pay whatever
they are charged. Whenever an agreement is reached with a development agency, the public
becomes the losers. Frequent twists and turns in the agreement are also not very
surprising. But why is it that the lending agencies invariably get the upperhand in
negotiations? Simply because our leaders and experts have neither the bargaining power nor
a sense of moral responsibility. International financial and development institutions seem
to be capitalizing on this weakness.
Development in Nepal - be it in hydro-power generation or agriculture - is
not possible without the cooperation of foreign agencies. But this does not in any way
suggest that developing countries should accept their conditionalities and guidelines
blindly and meekly. The buck does not rest there, however. Our own authorities are equally
to be blamed. Last year, when the government entered a 3.5 billion rupees soft loan
agreement with the ADB, it also readily accepted its stipulations which called for a 60
percent price hike within one month. Unable to stand up to the ADB, the government then
turned around and tried to sell the hike to the public. Now that the tables are turned on
them again, the NEA is making lame excuses about developing "self-reliance". The
15 percent of the populace which has electricity is again being told that they have to pay
higher prices so that the remaining 85 percent will some day have electricity also. There
seems to be something fishy about this line of thinking. Developing the power
infrastructure is fine. But such development should be paid for by those who will benefit
from it, not by those who are already paying one of the highest power tariffs in the world
for their electricity. Is this what self-help means in this country? It is also no secret
that our electricity network is riddled with problems like wastage, leakage, poor
inventory management, failure to realise tariff and to negotiate favourable deals with
power developers. These are problems that need more urgent attention than ever before. So
many plans have come and gone, but poverty alleviation still seems to be a far cry.
Whatever has happened has happened. But this time around, we cannot let the NEA, who
unashamedly accepts that Nepal’s electricity tariff is one of the highest in the
world, have its way. Our consumers are already overburdened, and more shoot ups would only
bleed them white.
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