July 5: Industrialist and businessmen have expressed their dissatisfaction over the government’s decision to raise electricity tariff. According to them, the raise in electricity tariff will increase production cost of industrial goods resulting low competitiveness in the market and downfall of industries.

Recently, Electricity Tariff Fixation Commission (ETFC) has hiked the current electricity tariff by 19 percent to be implemented from July 16. “Every consumer is suffering due to the monopoly of Nepal Electricity Authority,” says Pashupati Murarka, Chairman of Federation of Nepalese Chamber of Commerce and Industries (FNCCI). “It is quite surprising that the NEA has taken the power hike decision in the middle of the excessive power shortage period. The nation is in lasting power shortage problem due to the monopoly of NEA on electricity.” adds Murarka.

The raise in electricity tariff is likely to discourage industrial sector affecting the government’s target of uplifting the nation. The government has targeted to uplift the nation to developing nations by 2022 and to sustainable developed Nation along with nation with medium income by 2030.  

The government’s decision has further discouraged the already suffering industrial sector. Businessmen opine that the tariff raise will further drive the double digit inflation rate.  “The tariff raise will axe the economy which is already reeling under short of remittance growth, expansionary budget, heavily increasing trade deficit and increasing consumption” says Confederation of Nepalese Industries (CNI).

NEA has taken irrelevant decision of increasing tariff which will negatively affect consumers and businesses instead of increasing internal capacity to cash-in profit. Industrial sector has expressed great dissatisfaction over the absurdly taken NEA decision.

“The NEA needs not to take electricity tariff hike decision given than the authority could control power leakage of 28 percent. Additionally, it could create capable manpower, minimise operational expenses, adaptation of corporate good governance and successful implementation of strategic plan to increase its overall capacity,” says CNI issuing a circular.

Moreover, industrialist have been demanding industrial feeder for regular electricity supply since the long time. Although some of the industries have the facility, most of them lack such services.

Similarly, there is a provision of 5 percent hike in electricity tariff annually. Therefore, the recent hike of 19 percent is against the law. If only the government could revise the PPA rate to electricity producers in the same ratio as increased power tariff, investors will be encourage to invest in power sector.