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Kathmandu Thursday May 10, 2001 Baishakh 27, 2058.
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Govt to
hike Power tariff by 5pc annually
By Shree Ram Subedi
KATHMANDU, May 9 - The government has decided to
increase the price of electricity by maximum of 5 per cent annually, a government notice
says.
The notification that appeared on the gazette
published on Monday will allow the concerned authorities to hike the price on a semi
automatic tariff adjustment (SATA) basis tied with the consumer price index (CPI) of Nepal
Rastra Bank (NRB), the central bank.
To this effect, the government has already
amended the Rule 6 of the Electricity Tariff Fixation Regulation - 2050, according to a
notice published in the gazette.
Nepal Electricity Authority (NEA), the
state-owned monopoly, has already sent price revision proposal to Electricity Tariff
Fixation Commission (ETFC). It plans to increase the revenue and hopes to curb rampant
power leakage.
The proposal is based upon the gradual increase
of per unit price of electricity, with the increase of the capacity of ampere meter
installed in each households and firms.
"Once the proposal is approved by the
commission, then the annoucement of price hike will come," said Sharada Prasad
Sharma, Joint Secretary at the Ministry of Water Resources (MoWR), adding that the final
decision would be made by the Commission.
"The new move will make NEA more
sustainable and increase its self financing ratio," he added. Officials at the
ministry accepted that the increment is based upon the conditions put forward by donor
agencies.
"These new development will pave the way
for loan effectiveness committed by Asian Development Bank (ADB) and other donor agencies
which have asked to review the price structure for long " added a highly placed
official at NEA.
The ADB had agreed to provide US $ 50 millions
for the 8th power project in June last year but has postponed the date of loan
disbursement by 3 months just a week ago mainly because of the government’s delay to
take decision on the price structure.
The conditions of the agreement were to maintain
NEA’s self-financing ratio (SFR) at 23 per cent and Rate of Return (ROR) at 6 per
cent. NEA’s SFR and R0R , presently, stand at 11 and 4.38 per cent respectively.
"This will certainly hit the consumer
hard’ says Sharma adding that there was no alternatives left on this regard.
The government had hiked the electricity price
by 27 per cent per unit in an average on November 1999.Electricity price has been hiked by
270 per cent in the past 10 years in Nepal.
Only 16 per cent of nation’s households
have access to electricity at the moment.
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