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VOL. 03, NO. 02, June 16, 2009 (Ashadh 02 2066)
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WHITHER BIJULI ADDA - One
SB Pun, Bhadra 2050 (August 1993)
Writer’s note: This article was written for Nepal Electricity Authority’s (NEA) magazine ‘Vidhyut’ sixteen years ago. As the writer was still with NEA, he has at the end of the article stated that the views expressed were entirely his own. The article did ruffle the feathers at the Ministry of Water Resources (Minister LP Ghimire, Secretary SN Upadhyaya and EDC Chief VS Shrestha). In reprinting this article, the writer refrained from the temptation to ‘re-touch’ what he had then written. The only additions to this article are the explanatory footnotes.
A. TECHNICAL BACKGROUND:
The era of Bijuli Adda dawned in 1911 with the commissioning of the 500 kW Pharping Hydro Plant. This was augmented in 1934 by the 800 kW Sundarijal Hydro Plant. With the commissioning of the 1,600 kW Mahendra Diesel Plant for the coronation of His Majesty King Mahendra in 1956, the diesel era unfortunately started - Teku 500 kW, Lainchaur 500 kW, Naksal 500 kW, Bhaktapur 250 kW, Patan 1,500 kW, Birgunj 500 kW and Hetauda 4,500 kW. On the eastern region, though Morang Hydro came strongly in 1943 with the 1,600 Kw Sikarbas Hydro Plant, this had a premature death in 1961 when a land slide totally damaged it. Despite the name Hydro, generation in Biratnagar was entirely diesel through the 1,000 kW diesel engine. The era also saw the cropping up of a number of private sector ventures that ran diesel engines: 220 kW Dharan Electric Company, 100 kW Birgunj Electric Supply Company and Nepalgunj’s 120 kW Jaya Bageshwari Electric Company. With the emergence of 18,000 kW, Trishuli and 10,000 kW Sunkoshi in the late 1960's and early 70's, the hydro era became predominant. Another dominant entry into the Power Sector was the donor agencies like IDA, ADB, JICA, Kfw, French, Finnida etc. They were principally responsible for the 60,000 kW Kulekhani I, 32,000 kW Kulekhani II, 69,000 kW Marsyangdi, the 132 kV grid networks from Anarmani in the east to Mahendranagar in the west. In a humble and silent way, Butwal Power Company came up with the 3-staged generation of the 1,000 kW Tinau Hydro Plant. But somewhere something went awry and the diesel era has now cropped up its ugly head once again.
B. INSTITUTIONAL BACKGROUND:
The Bijuli Adda of the "Angrej" Kilburn, Ganguly, Thulo Baje, Kasaju and Sanu Baje became in 2019 Nepal Electricity Corporation and Electricity Department. The Electricity Department was entirely a wing of HMG headed by a Chief Engineer responsible for investigation, feasibility, planning and construction. Initially ED carried out operation and maintenance as well but later these activities were handed over to the Nepal Electricity Corporation. The Corporation had a General Manager and the NEC Board was chaired by the Secretary of the Ministry. Over the years, like ladies fashion ideas change and the post of General Manager was upgraded to Executive Chairman. This was experimented for sometime and the government again reverted to the post of General Manager and the Secretary as the Chairman. With the donor agency exerting its powerful influence on the power sector, a major decision was made by HMG when in 2042 it merged the 4,200 NEC staffs with 1,400 ED staffs to form NEA. This was a painful process, but as one of the covenants of the much needed Marsyangdi loan, HMG took that painful decision. The irony of this decision is that though the Marsyangdi covenant forced the formation of NEA, the Marsyangdi Project never came under the purview of NEA. It was operated by a different Board under the chairmanship of the Minister. NEA was and still is one of the largest public sector undertakings in Nepal; it was flouted to have one of the most powerful Boards with five HMG Secretaries. With the recent changes in the Electricity Acts and emphasis on the role of privatization, NEA Board now has only two HMG Secretaries and four members from the general public.
C. NEA'S STOCK TAKING:
Except for the 5 MW Andhi Khola Plant operated by Butwal Power Company, NEA has been operating all the 270 MW Hydro and Thermal Plants. In F/Y 1991/92 it had a peak demand of 216 MW, gross generation of 985 GWH, a sale of 730 GWH and a loss of 24.5%. It has 356,000 number of consumers which means only 10% of the population of Nepal have access to electricity. Its revenue of 143 crores consist of the domestic category 38%, the industrial 30%, commercial 8 %, non-commercial 9% and export to India 10%. It has a net asset of 2,294 crores, the long term loan being 1,077 crores and annually pays an interest of 63 crores to HMG. The present staff strength is about 9,000. By the year 2000, even with the implementation of the load management measures, NEA's peak demand is expected to be 447 MW and a gross generation requirement of 2,018 GWH.
D. WHITHER NEA? :
Now having discussed its ancestry, its ancestral property and legacy, NEA presently is in a very confused state. Some even go to the extreme and state that NEA's funeral pyres are being prepared. The NEA Act of 2042 has been amended in 2049 and the major thrust of this amendment is the participation of the private enterprises in the power sector. With the government hard pressed for funds, and the continuing load shedding, this is definitely a very welcome step. We, in NEA, have to readjust ourselves so that the private sector also gets seats. But what we in NEA can not comprehend is the formation of the Electricity Development Centre within the ministry. Are we taking a great leap to the pre-2042 era of Electricity Department and Corporation? A look at Electricity Development Centre's organizational chart does not imbibe much confidence to us. The Centre has three departments: a) Investigations, Feasibility and Planning b) Privatization c) Inspectorate. Inspectorate has long been dead for decades and the revival is a welcome step. As earlier stressed, privatization is also a very welcome step. But the bone of contention for NEA is the formation of the department for planning and investigation. Does this mean that NEA prepares its two Engineering and Planning Directorates for the "Aryaghat"? Not many are aware of the fact that, as per the agreement between HMG and NEA, the local cost for construction is being shared. For 2050/2051 NEA bears 55% of the cost and HMG 45%, and each year this proportion increases by 5% until NEA is made to bear 75%. This policy of HMG to wean away NEA from its resources is undoubtedly a good one. Now what will HMG do to EDC?
E. CONCLUSION:
With the birth of Electricity Development Centre, it is not only the role of NEA but also that of Water and Energy Commission Secretariat that has to be demarcated. In this context, it is expected that HMG's POWER SECTOR DEVELOPMENT STRATEGY will help to define the role of WECS, EDC, NEA and Private Sector so that the present confused atmosphere will be much clearer. It is also expected that those responsible for formulating this strategy will not be looking at any one institution with a jaundiced eye. In the interest of the Nation's power development process if NEA has to be made a sacrificial goat, we in NEA would readily assent. But in the name of improvement, let there be no experiments that toy around with employees' careers, with institutions and most importantly with the country's power sector.
NOTE:-
The views expressed in this article are entirely that of the writer.
Built by Padma Sundar Malla at the height of the Second World War with Escher Wyes turbines from Zurich and General Electric generators and transformers from Schenectady/ New York. PS Malla is the first father of Nepalese hydro and Dr. Dambar Bahadur Nepali followed in his footsteps with the 22 MW Chilime recently – the two rare Bhumiputras of Nepalese hydro!
Birgunj Electric Supply Company was actually established during the Rana regime in 1949.
Bageshwari Electric Company was established by Bishnu Prasad Upadhyaya through NIDC loan. Some say the company’s installed capacity was 300 kW. These small private electric companies all withered because of the government’s strict ‘hands off the private sector’ policy to favour public sector undertakings that was then in vogue internationally.
Through the efforts of United Mission to Nepal’s Od Hoftun, a Norwegian in Nepal since the late 1950s, who also fathered the 5,100 kW Andhi Khola hydro power plant in 1986.
Not an unfamiliar scene to the present 16 hour per day load shedding era, replete with 250,000 kW of diesel plant initially now apparently replaced by 250,000 kW of Indian import on ‘long term commercial arrangement’ to eradicate it. India terms the Kosi power tariff now over IC Rs 2.50 per unit ‘concessional’ and the 70 million free units from Tanakpur ‘goodwill gesture’ towards Nepal.
Sardar Bhim Bahadur Pande in his Tes Bakhat ko Nepal indicates that this ‘angrej’ was one of the initiators of the 22 MW Gaidakot hydro-plant of AD 1949, estimated at Rs 1.8 crores by the British consulting firm, Percydrew & Co. Mohan Shumshere shot down this Gaidakot project on the advice of the Indian ambassador, CPN Singh. Sing promised Mohan a much cheaper power from Kosi Barahchhetra High Dam – 2 paisa versus Gaidakot’s 6 paisa per unit! Nepal did get the Kosi/Kataiya power from 1971 but at IC 10 paisa per unit.
Thulo Baje Surya Nath, Sanu Baje Lakshman Prasad as also Gyan Mani and Lalit Mani Bajes!
Actually it was ADB’s covenant in the Fourth Power Project that stipulated ‘creation of a new institutional structure acceptable to the Bank’. The World Bank’s Marsyangdi covenant merely dittoed the ADB’s covenant on institutional structure.
In an informal talk with this writer, Harshaman Shrestha, the first Managing Director of NEA, did admit it was a mistake. He felt the ‘contracting hassles’ of the Marsyangdi Project will interfere his efforts to transform NEA into a strong entity.
Within five years by 1990, the employees at NEA ballooned from 5,600 to 9,000 – the ‘bharti kendra’ of the powers that be! In 2008, NEA employees’ strength still remains at around 9,000.
The debate now is over Unbundling NEA into Generation, Transmission and Distribution entities that is proposed in the new Electricity Act. It was on the advice of the multilateral institutions that our power sector was bundled in 1985 and everybody is crying hoarse for NEA unbundling. The recent collapse of large banks and motor companies in the western world and the measures adopted to prop them up through government interventions in the guise of recapitalization and fiscal stimulus so that their citizens do not lose their shirts should be an eye opener for all our own policy makers. The proverbial ‘lean and thin’ mantra, in a developing under-paid country like Nepal with no new job opportunities or unemployment doles, needs to be chewed with a good pinch of salt!
So that the government’s burden for new construction will be ultimately limited to only 25%.
In less than a decade, Electricity Development Centre (EDC) flowered into the Department of Electricity Development (DOED) with considerable resource inputs from USAID. Like NEA, DOED is under public scrutiny for issuing ‘othara basna ko lagi matra’ project licenses and for little or no electricity-development contribution that is manifested by the ongoing heavy load shedding.
