Kathmandu, Nov 11: The Nepal Electricity Authority (NEA) is facing scrutiny for signing a power purchase agreement (PPA) worth Rs 430 million with Indian company PTC India without prior approval from the Electricity Regulatory Commission (ERC), violating the Electricity Regulatory Commission Act, 2017.
Under Section 74, Subsection 1(b) of the Act, ERC has the authority to determine electricity purchase rates and approve PPAs. NEA cannot legally set rates or finalize agreements with private or government-owned companies without ERC consent. Yet, under Energy Minister Kulman Ghising and NEA Managing Director Manoj Silwal, the PPA was executed on 13 October 2082 (25 Aswin 2082), two days before ERC formally approved it.
Documents show that PTC initially proposed a rate of Rs 6.74 per unit on 8 August 2082. Despite NEA suggesting a reduction, PTC submitted a higher rate of Rs 6.95 per unit on 6 Aswin 2082. Four days later, on 10 Aswin, NEA’s 1,013th board meeting unconditionally accepted the proposal and issued a Letter of Intent. The formal PPA was signed on 13 Aswin, while ERC approved the same agreement only on 15 Aswin.
Minister Ghising had claimed the PPA was signed transparently with ERC approval, but NEA and ERC records show otherwise, exposing the claim as misleading. Sources confirm that the higher rate was introduced outside standard procedures, raising questions of political influence and possible manipulation.
Former ERC Chairman Jagat Prasad Bhusal noted that executing a PPA without prior regulatory approval is a serious legal violation, undermining the regulator’s authority. The episode highlights governance lapses in Nepal’s electricity sector, where political interference and administrative shortcuts risk inflating costs for consumers.
The NEA-PTC incident underscores the urgent need for transparency and adherence to regulatory procedures to prevent similar financial and legal irregularities in future power procurement projects.
People’s News Monitoring Service
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