Kulman Ghising’s tenure at NEA in doubt

Kulman Ghising, the man widely credited with ending daily 14 hours of power cuts is due to step down next month after four years as head of the Nepal Electricity Authority (NEA). His term can be extended by another four years, but powerful businesses whom Ghising targeted as well as their political patrons want him replaced.

Ghising is a no-nonsense electrical engineer who knew exactly why Nepali consumers were suffering crippling power cuts, and went about systematically reducing pilferage, and cutting off 24-hour dedicated feeds through which his predecessors had been providing businesses low tariff electricity in return for kickbacks.

He expedited hydropower projects that had been languishing, confronted locals who had obstructed the construction of transmission lines, imported power from India to meet winter shortfall and exported electricity during the monsoon surplus.

Most Nepalis did not care how he did it, but regard him as a saviour who took them from darkness to light.

But as his four-year-term comes to an end, there are those who are envious of the enormous public respect he has earned, as well as others who benefited for years from NEA’s favours and want him out.

Through all the smear campaigns against him, Ghising has held fast to his conviction that Nepal’s path to prosperity lies in generating enough power so Nepal’s 30 million people can switch to electrical appliances, manufacturing and transport, and reduce the growing dependence on petroleum imports.

The statistics say it all. From 2012 to 2016, when Nepalis faced the longest periods of load-shedding, the NEA cumulatively lost Rs25 billion. The greatest annual loss of nearly Rs9 billion was in fiscal year 2015-2016. (See graph)

Ghising was appointed to lead NEA by Energy Minister Janardan Sharma in August 2016 during the prime ministership of Pushpa Kamal Dahal, amidst much resistance from officials who had profited from black marketing electricity.

But Ghising’s appointment was a turning point for the NEA and for the country. Within a year of taking over, NEA’s profits soared to Rs1.5billion, and is set to cross Rs11billion this fiscal year. Even more than lifting the Authority out of the red, it is the assurance of uninterrupted power that has spurred growth and employment in Nepal.

Kulman Ghising has often been called ‘Cool Man’ by his admirers for his can-do attitude and his obsession with problem-fixing – attributes rare among Nepal’s politicians and technocrats. He was educated almost entirely in Nepal, and got his engineering degree from Jamshedpur in India. He has served 22 years in NEA, rising up the ranks to promote rural electrification, manage large projects like Chilime, and deal with Nepal’s private power producers.

Starting out, Ghising did not have a magic wand. With experience of the inner workings of the NEA and of handling projects in Nepal, he knew what the problems were. And he did what any manager would do: address the losses on the supply side to ensure that it kept up with demand and growth.

That is why his first order of business was to cut the dedicated lines providing uninterrupted electricity to industrial barons. He increased their tariffs and prioritised supply to household consumers.

Ghising knew that Nepal’s electricity grid had some of the highest rates of pilferage and system loss, even among developing countries. Leakage alone was 26%, and NEA started a campaign against consumers stealing electricity from transmission lines with ‘hooks’. By this year, pilferage has been slashed to 15%, saving NEA Rs7 billion.

The next step was to reduce system loss which occurs when the distance between the point of generation to consumption is too long. So, NEA set about upgrading transmission lines, substations and transformers.

Despite all these moves, there was still a shortfall in electricity and Ghising filled this gap with imports from India through the Dhalkebar-Muzaffarpur transmission line. But as NEA’s own hydropower plants and private producers started coming online, imports have declined steadily from 35% of total supply for the past five years to 22% this year.

This year’s power import from India also dropped because of the COVID-19 lockdown, which reduced domestic demand for electricity, and increased production from Nepal’s own run-of-the-river power plants due to a vigorous monsoon.

With the completion of the 453MW Upper Tama Kosi this year, import from India is expected to drop further, even though there will have to be some power import to meet winter demand spike. Nepal’s monsoon surplus is expected to grow further in the coming years which is why Ghising has been publicly appealing to Nepalis to switch to induction stoves for cooking, and was opposed to the hefty new tax on electric vehicles announced by Finance Minister Yubaraj Khatiwada in this year’s budget.

NEA’s revenue has also gone up because of a hike in tariff, despite which demand has also gone up. NEA’s customers have increased by 1.3 million in the past four years, and there has been an annual increase of 20% in electricity demand in that period.

Aside from all these measures, Ghising’s main achievement in the past four years has been his ability to dismantle the political-business nexus that created an artificial shortage in electricity that allowed a black market to flourish. NEA’s previous heads, dispatchers, and their political patrons all benefited from this scam.

At one point in the winter of 2016 when Nepal was reeling from the aftermath of the earthquake and the Indian Blockade, Nepalis were getting only six hours of electricity a day. Collusion between NEA officials and industrialists was allowing 315MW of cheap electricity to be diverted to businesses at a time when Nepal was only producing 750MW.

Ghising is an outstanding manager with the simultaneous ability to be both a good cop and bad cop. He used his connections with high ranking NCP officials to deflect pressure from those who tried to discredit him. And he could go to the grassroots to convince locals to let transmission lines and substations in Lalitpur, Kabeli corridor, Kulekhani, or Ramechhap that had been delayed for decades due to opposition.

Last year, Ghising went to Rasuwa to personally threaten local contractors who were delaying the construction of a substation critical to evacuating electricity generated by power plants on the Trisuli River. A video of him berating the contactors went viral on social media, further raising his public esteem.

It is not that Ghising does not have critics. Some have said he got all the credit for ending power cuts, when it was the fortuitous completion of the crossborder transmission line that allowed him to end load-shedding with imported power. Some say the NEA’s profits are more due to tariff increases than a reduction in leakage. Private power producers also blame him for claiming credit for raising revenue by overcharging them.

Ghising has not been able to move forward on the need to unbundle the NEA’s generation, transmission and distribution so as to make the agency even more efficient. However, some say the NEA should not be fragmented because it would make an agency that Ghising has got back on its feet weaker again.

Most of the criticism is fuelled by powerful lobbies against Ghising for sending them overdue electricity bills worth billions. Some industrialists have claimed they never had a dedicated feed, and have been sent a bill. A committee has been formed to look into this, but there has been no conclusion.

Prime Minister K P Oli is said to be personally not in favour of Ghising’s extension. Insiders say he has promised the job to Sushil Gyewali, currently the CEO of the National Reconstruction Authority that coordinated earthquake relief. Oli could also be seeing Ghising as someone close to the ‘Maoist’ Dahal faction of the NCP.

If Ghising is removed, Oli will face public criticism for pandering to cronies and pushing the country once more into the dark ages. It will add to a long list of this government’s questionable political appointments, real estate scams, and alleged corruption in the import of medical equipment to fight the COVID-19 pandemic.