Nepali Times
Economic Sense
Shocking pestilence


Every year, when spring is in the air and summer is a mere whiff of the Bagmati away, your columnist takes out the family fans wrapped, jewel-like, in plastic bags with a sinking feeling: that there will be no electricity to run the wretched things. Last week I saw a group of twenty-odd tourists returning from the Patan Museum after reading signs that said loudly, clearly and in wonderfully expressive English, "No Electricity".

It is hard to gauge and quantify the impact of these interminable blackouts, but this Beed suspects we'd be horrified by the scale of damage. Unlike in California, this has been going on for years, and there's little here to justify "You deserve it" looks from Luddites. In fact, given how little we've managed to do to after years of dry season power-cuts, people might be forgiven for thinking we were the Luddites.

Because, you see, the problem of blackouts dates to before the Kulekhani era. There are talks, seminars and conferences galore, but we're nowhere near finding a solution. The nub of the problem is planning-or lack thereof. Forecasting both demand and supply, and learning the ageless wisdom of the changing seasons, is the first order of business.

The issue is getting into the habit of setting both quantitative and qualitative targets. Here is what we do: look at the total megawatts required, taking into consideration the yearly demand and supply. Here is what we should do: Figure out what the peaks and nadirs of those curves are, and plan around them. We need to get creative with numbers, not just see if the totals add up. Numbers are important, but so is quality.

Power is a consumer item and consumers pay for quality power. There has to be continuous supply of a certain frequency and voltage. If one has to invest in other back-up devices and rely on them for a significant part of the year, what's the point in spending money on a minimum fee and meter rental? The tariff a utility company like the Nepal Electricity Authority (NEA) charges is based on the assumption that there will be uninterrupted power supply. If the company can't deliver, there should be a penalty. The costs to the consumer from erratic supply and blackouts should be factored into the bills. NEA is proposing a hike in tariffs; while it ought to consider payments to consumers on account of disrupted power supply. Activist consumer forums must look at this closely.

Businesses only seems to wake up only in times of crisis instead of engaging in constructive efforts at all times to help the government come up with a rational power policy. The cost to the nation due to investments in alternative arrangements for power and the impact on productivity and efficiency is immense-businesses would do well to realise this.

An obvious answer is increasing the efficiency of the NEA. This could be best done by unbundling the utility into separate generation, transmission and distribution units. We keep harping on this, but it needs to be done. Reducing transmission and distribution losses alone can provide a good amount of additional power to combat the dry season shortage.

At the risk of sounding like a repetitive drone, I will say in this case also that we need to work out a long-term strategy. We've seen two big private sector projects up and running-definitely more are required. The time has come to see whether, experimentally at first, to be sure, distribution could not be outsourced to private sector networks. The bottom line is: adequate quality power for consumers charged one of the highest tariffs in South and East Asia.

(11 JAN 2013 - 17 JAN 2013)