Minister Khadka interference hampers NEA’s efforts to collect arrears, weakens accountability

KATHMANDU: In yet another instance of government overreach, Energy Minister Deepak Khadka’s directive to halt the disconnection of power lines for industries defaulting on payments has sparked widespread criticism. The Nepal Electricity Authority (NEA), under Managing Director Kulman Ghising, had initiated a long-overdue drive to recover arrears from industries owing millions. However, the government’s interference through the Electricity Regulatory Commission (ERC) has not only undermined NEA’s authority but also raised serious questions about the government’s commitment to transparency and fiscal responsibility.

Minister’s Controversial Move

Minister Khadka recently exerted pressure on the ERC to issue a four-point directive to NEA, halting plans to disconnect power lines for 28 industries that have repeatedly failed to clear their dues. This decision has effectively paralyzed NEA’s initiative to address mounting arrears, weakening its ability to function independently and sustainably.

The NEA had issued multiple warnings to the defaulters and, as a last resort, initiated disconnections in accordance with legal provisions. By law, NEA is authorized to cut off power to consumers who fail to pay their dues within 60 days. Instead of supporting NEA’s efforts to enforce financial discipline, the minister formed a committee and pressured the ERC to intervene, effectively shielding the defaulters.

Undermining Accountability

The government’s actions have sent a dangerous message, prioritizing political interests and appeasing industrial defaulters over strengthening public institutions. By pressuring the ERC to intervene, the minister has undermined NEA’s mandate and the principle of accountability. This interference not only compromises NEA’s financial health but also emboldens industries to ignore their financial obligations with the assurance of government protection.

Minister Khadka’s formation of a technical committee to study NEA’s billing system appears to be another stalling tactic. The three-member committee, led by Dr. Arbind Kumar Mishra, has yet to begin its work, and its legality has been questioned. NEA’s refusal to cooperate with this committee, citing doubts over its mandate, highlights the lack of coordination and transparency within the government’s approach to resolving the issue.

Double Standards in Governance

This is not the first time the government has sided with influential industrialists at the expense of public institutions. By halting NEA’s efforts to collect dues, the government has effectively encouraged non-compliance among defaulters, placing an additional burden on the broader public. It is the taxpayers who ultimately bear the cost of such mismanagement, as NEA’s financial health deteriorates due to unpaid dues.

Ironically, the same government had supported NEA’s earlier disconnection of industrial power lines, with the ERC stating that legal measures should be taken to recover dues. This sudden reversal of stance exposes the double standards and inconsistency in government policies, further eroding public trust.

Economic Ramifications

Nepal’s energy sector, already grappling with inefficiencies and resource constraints, cannot afford such political meddling. NEA’s inability to recover arrears jeopardizes its ability to invest in critical infrastructure and expand energy access. Moreover, the government’s intervention discourages much-needed reforms in the energy sector, deterring potential investors who seek a stable and predictable policy environment.

The current situation reflects poorly on Nepal’s broader investment climate. When public institutions like NEA are prevented from operating independently, it sends a message to foreign and domestic investors that the government is willing to prioritize political interests over economic stability.

Public Reaction and the Way Forward

Critics argue that Minister Khadka’s actions are a glaring example of governance failure. Instead of enabling NEA to enforce financial discipline, the government has chosen to side with defaulters, perpetuating a culture of impunity.

The Energy Ministry must immediately withdraw its directive and allow NEA to continue its efforts to recover arrears. Furthermore, the government should establish clear policies to protect public institutions from undue political interference. Ensuring financial discipline within the energy sector is crucial not only for NEA’s sustainability but also for building public trust in governance.

If left unchecked, such government interference could lead to long-term damage to Nepal’s energy sector, undermining efforts to create a transparent and accountable system. As a public utility, NEA deserves the full support of the government to operate independently and fulfill its mandate. Anything less is a disservice to the Nepali people.