Sacking of NEA chief exposes cronyism

By sacking the person that many Nepalis credit for ending prolonged daily power cuts, the coalition led by Prime Minister KP Oli has added fuel to the fire as anti-government forces plan protests in the coming weeks.

A Cabinet meeting on Monday decided to replace the Executive Director of the Nepal Electricity Authority (NEA) Kulman Ghising with Hitendra Dev Shakya.

There is a sense of deja vu since both men led the NEA in previous stints.  Ghising had been NEA chief in 2016 and again in 2021, when he had replaced Shakya. Ghising is backed by Pushpa Kamal Dahal of the Maoist Centre, which is now in the opposition, and Shakya is regarded as being close to Oli’s UML.

Relations between Ghising and Energy Minister Dipak Khadka have been strained for the past year after the NEA cut off electricity supply to industries for failing to pay dues dating back to 2016. At the time, factories were provided uninterrupted power from dedicated lines, while the rest of the country suffered power cuts sometimes lasting 18 hours a day.

Industrialists cried foul and appealed to Minister Khadka and Prime Minister Oli, contesting the NEA’s overdue bill. Khadka, who is from the Nepali Congress (NC), is himself a hydropower entrepreneur and his appointment as energy Minister was seen as conflict of interest.

Ghising is largely credited for having ‘ended loadshedding’ because he redirected electricity from industry to households -- even though imports from India and increase in installed capacity worked in his favour.

Following Ghising’s dismissal, there were protests at Kathmandu’s Mandala intersection on Tuesday with demonstrators holding placards that read: ‘Kulman Ghising: Architect of a Bright Nepal’. Even members of the coalition government opposed Ghising’s sacking. Information Minister and government spokesperson Prithvi Subba Gurung on Monday said pointedly that he had no knowledge of Ghising’s removal.

Energy Minister Khadka has sought clarification several times from Ghising, accusing him of ‘insubordination’, and his main gripe was that the NEA chief worked ‘arbitrarily’ on back-pay tariffs from industrialists and making energy agreements with India on his own.

He did not like Ghising going off to India to talk about power trade, and questioned his authority to make deals bypassing the ministry. The minister even gave Ghising a performance ‘report card’ in which he was given zero out of 100.

Speaking in Parliament on Sunday, Khadka warned that Nepalis would once more have to suffer load shedding because of Ghising. “We are in a situation where households may soon face power cuts. So Kulman isn’t really the hero bringer of light,” said Khadka, in remarks that were lampooned on social media and newspaper cartoons.

A prolonged winter drought and below-normal precipitation in March means Nepal’s rivers are running low, reducing the installed capacity of the mainly run-of-river hydropower plants by one-third. In addition some of the bigger plants like the 456MW Tama Kosi were damaged in last September’s floods.

The spring season shortfall coincided with India announcing it could not export electricity to Nepal during peak hours because of its own domestic demand. Ghising and Khadka appeared to be negotiating separately with India on increasing power export to Nepal, and often seemed to work at cross purposes.

The NEA under Ghising had been making up for the power deficit by cutting electricity to industries to maintain household supply. This month, industrial corridors in the Tarai have been suffering power cuts from 6pm to 6am, forcing them to use diesel generators.

These cuts have added to the woes of powerful businesses which NEA had been pursuing to pay their back dues. Industrialists had been putting pressure on the government to rein in Ghising. Two industries did play part of the sums they owed to NEA last week, just before Ghising got the sack.  

Ghising had wide support in Nepal’s public sphere, with some speculating that he may have political ambitions. Which could be another reason that the UML and NC are wary of him, since he could be a Maoist candidate in the next elections. Ghising has said he will contest his dismissal in court.

It was during Ghising’s 2016 stint that he solved, seemingly overnight, debilitating power cuts. No doubt, he had some luck in timing, but being an electrical engineer himself also invested in upgrading transmission and distribution.

“Some things were in place when Kulman Ghising came in, but what he did first was to free up 400MW from the dedicated line to industrialists,” recalls energy expert Kumar Pandey.

Ghising also benefited from the completion of the 140km transmission line from Dhalkebar to Muzaffarpur in India, which meant Indian exports could make up for the shortfall, allowing NEA to end power cuts to households.

“He also arranged power cables to reroute energy distribution within the country, which was huge,” says Pandey. All of these actions freed up to 700MW in the evening, which Ghising was able to redistribute to the public.

Ghising is also credited with effective negotiations with India to increase the export of 1000MW of Nepal’s surplus electricity in the monsoon – despite India refusing to buy power from plants with Chinese investment or contractors.

Electricity exports allowed NEA to go from being a loss-making entity to earning a profit of Rs11.36 billion over Rs53.18 billion in sales.

“Bad infrastructure was causing localised power cuts. A transformer in Kohalpur would burn up and wouldn’t be fixed for a month, and we had no spares,” Ghising told a YouTube interview two days before his removal. “Loadshedding was also causing more loadshedding because consumption would soar when electricity was restored.”

Ultimately, his dismissal reeks of politics, the business interest cronies and clashing egos. The only silver lining seems to be that Ghising’s replacement Hitendra Dev Shakya is also a grid development and power sector expert, and knows the sector well.

Asking Ghising to ‘explain why he shouldn’t be removed from his position for insubordination’ essentially proved that this was a power play, and the NEA chief had to be removed because he was a ‘Maoist man’.

However, the removal of a popular technocrat from the NEA could further anger Nepalis who are already disillusioned with established political parties and their cronyism.  One barometer of public frustration is the growing support on the streets even for pro-monarchist forces led by the RPP and RPP-N who are planning further nationwide rallies next month.