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Two employee organizations have drawn attention to the power purchase and sale agreement (PPA) decision made by the Nepal Electricity Authority Board of Directors. The Authority's Staff Welfare Council and the National Staff Union issued a press release saying that the decision to open a PPA of 4800 megawatt capacity and to give a 50 percent discount on demand charges to domestic customers who consume up to 20 units has attracted serious attention.
According to the staff organization, the PPA was opened without even preparing an action plan for financial risk assessment, market assurance, and risk reduction on Chait 12, the same day Hitendradev Shakya was appointed as the executive director of the authority.
"According to the policy passed by the government at various times, the PPA quota of the authority is determined and an action plan is created and implemented to minimize the financial risk that may be incurred by the authority during PPA under the 'take or pay' provision, and if the authority incurs a loss while doing so, it is a past practice that the Cabinet of Ministers decides that the Nepal government will pay for the same," said the statement.
The board of directors meeting of the authority has decided to open a PPA without preparing an action plan for financial risk assessment, market assurance, and risk reduction, and to give a 50 percent discount on demand charges to domestic customers who consume up to 20 units.
Tariff concessions provided to various customers including government offices, cold stores, milk moisture centers, demand discounts provided during Covid, domestic customers with 5 ampere capacity The employee organization has also stated that the Nepal government has not provided billions of funds to the authority, including the tax exemption of up to 20 units, road lighting arrears and the budget allocated for electrification. Therefore, they believe that the authority's cash flow has been adversely affected.
Without even assessing the financial risk of the market, they stated that if PPA is done under the 'take or pay' provision, the organization will collapse financially. "The said decision taken by the Executive Committee on 12th Chaitra 2081 will be implemented by creating an action plan to minimize the financial risk to the Authority and if the Authority incurs losses while doing so, we strongly urge you not to implement it until it is ensured that the Government of Nepal will pay for it," the statement said. If the
is not implemented, the employee organization said that they will be forced to hold protest programs in accordance with the Trade Union Act and Regulations.
