Prolonged power cuts were not due to undersupply but because of rampant corruption

Kathmandu is now lit up after the end of load-shedding. Pic: Bikram Rai

Nepalis endured a crippling power shortage for a decade from 2006-2016, and were told over and over again that it was because of the gap between demand and supply. The Nepal Electricity Authority (NEA) blamed the war for delayed projects, political instability -– everything but corruption.

However, in 2016 Nepalis got a pleasant surprise. As soon as the NEA had a new chief, Kul Man Ghising, they started getting 24 hours of power supply. It was a miracle. Or was it?

Ghising said modestly then that it was just a matter of “better management of demand and supply”. But our investigation has revealed that Nepalis did not suffer from load-shedding just because of undersupply but because of structural corruption —  top NEA executives were selling electricity to industrialists, leaving household consumers in the darkness for 10 years.

In the winter of 2014, Nepalis were enduring 14 hours of power outage every day at a time when the NEA was supplying uninterrupted electricity to selected cement factories, cotton mills and steel manufacturers.

Hydro-electricity cost Rs7 per unit that year — four times cheaper than per unit cost of diesel-powered generators (Rs29). Industrialists wanted cheap uninterrupted power and were willing to pay the NEA brass under the table to give them a dedicated feed. Businessmen saved millions they would have otherwise spent on buying expensive diesel. NEA officials filled their pockets. And everyone got their share.

Documents which Himal Khabarpatrika has acquired show that NEA Managing Director at the time, Mukesh Raj Kafle, alone sold 50 MW of electricity to Reliance Spinning Mill, Triveni Spinning Mill, Hulas Steel, Shivam Cement, Sarbottam Cement and six jute mills in Biratnagar, leading to load-shedding even during the monsoon.

The modus operandi was simple: industrialists requested dedicated feeders, the NEA’s regional managers recommended uninterrupted power supply, and the MD ordered the dispatchers to ensure 24 hours electricity to selected customers.

The NEA's former MD Mukesh Raj Kafle and Reliance Spinning Mills Ltd's letter (right) on which he has instructed the dispatcher to provide 24-hour electricity supply to the applicant.

Kafle learnt the trick from his predecessors when the nexus evolved in 2006 while Arjun Karki was NEA chief and Sher Singh Bhat headed the Load Dispatch Centre.

Karki and Singh forced Nepalis to bear up to 17 hours of power outage daily in winter, while supplying 24-hour power to influential business groups. In January 2013, the NEA Board of Directors ordered that dedicated feeders be disconnected. But that decision was reversed when Rameswor Yadav became the NEA’s new MD.

That year, a probe panel led by Shyam Sundar Shrestha, Deputy Director General of Electricity Development Department, concluded that the NEA was ‘arbitrarily’ supplying uninterrupted electricity to industrial plants operated by powerful businesses. The panel recommended further investigation and action against the guilty.

After Kafle became MD, he brushed that report under the carpet, blaming undersupply. Only after Ghising replaced Kafle did the NEA cut the dedicated feeders to industrial plants, and made sure electricity was distributed evenly. 

Ghising also imported more electricity from India to fill the gap caused by the increase in suppressed demand. But NEA spokesperson Prabal Adhikari says cutting off dedicated feeders to industries and importing more electricity from India were not the only factors leading to an end to power cuts.  

“We have also cut leakage. People don’t use inverters to store power in batteries, and this also reduced demand,” he explains.

Apart from industrialists and NEA officials, the other sector that benefited from power cuts were solar and diesel generator traders. In 2015, Nepal imported diesel generators worth Rs3.26 billion and solar panels worth Rs2.1 billion. This fiscal year, the country imported only Rs 2.1 billion worth of diesel generator and Rs290 million in solar panels.  

Who got 24-hour electricity?

FACTORIES

-Reliance Spinning Mill

-Shivam Cement

-Hulas Steel

-Sarbottam Cement

-Triveni Spinning Mill

-Arihant Multifibers

-Raghupati Jute Mill

-Baba Jute Mill

-Swastik Jute Mill

-Nepal Jute Mill

-GB Textile

-New Narayan Rubber

-Sakuara Pipe

-Sita Food Industry

-Satyawoti Concrete Industry

-Siddartha Mineral Pvt Ltd

-Hetauda Cement

-Sino Hydro Corportation

-Multi-Purpose Plastic Industry

-Pashupati Sim Pack

-Kamala Rolling Mill

-Asian Thai Foods

-Mainawati Steel Industry

-Arihanta Poly Pack

-Maruti Cement

-Dhanlaxmi Synthetic

-Negale cement

-Jagadamba Steel

-Hulas Wire

GOVERNMENT

-Shital Niwas

-Nirmal Niwas

-Ex-princess Prekshya Rajya Laxmi Shah

BANKS

-Rashtriya Banijya Bank

-Agriculture Development Bank

HOSPITALS

-Norvic Nursing College

-Devdahal Medical College

-Manipal College of medical sciences

-Himalayan eye hospital

-Neuro Hospital

-BP Memorial Hospital

-Green City Hospital

-Ishan Child Nursing Home

-Medicare Hospital

-Kantipur Dental College

-Sahara Hospital 

-Annapurna Neuro Hospital

-Norvic Hospital

-Shanti Hospital

-Jaya Buddha Hospital

-Pushpanjali Hospital

-Om Hospital

-Manakamana Nursing Home

-Saptagandaki Medical College

-Maula Kalika hospital

-Asha Hospital 

(Centre for Investigative Journalism)

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