Let’s talk. From energy producers to gold and silver traders, they are unhappy with the budget for the upcoming fiscal year 2082/83 BS.
Independent Power Producers’ Association Nepal (IPPAN) has been unhappy with the government’s announcement of a power purchase agreement (PPA) in accordance with the ‘Take and Pay’ principle in the River Flow Project (ROR).
Ippan has been dissatisfied with the government for trying to implement the new principle in PPA from the next financial year at a time when the principle of ‘take or pay’ is still in force while making PPAs.
According to the principle, the NEA may not buy electricity from the private sector when it is not necessary and cannot pay for the unsought electricity. Power producers say that this will sink the investment made by private power producers in energy production and the private sector will collapse completely.
According to them, according to the current arrangement, if there is a PPA as per the principle, the NEA does not need to pay the money for the electricity that can be produced even if it does not buy electricity.
According to IPPAN Chairman Ganesh Karki, the private sector’s share is more than 80 per cent when nepal’s power generation capacity is 3,600 MW. At present, the private sector has to apply for power purchase agreement (PPA) along with construction and survey from the Department of Power Development and the capacity of the Run of River (ROR) project is only 17,117 MW.
Of these, the capacity of the projects undertaken by the Nepal Electricity Authority (NEA) or the government is only 190 MW.
Karki said that the government’s announcement in the budget and program made public by the government at a time when the private sector is investing in this way in the energy sector has closed the way for the construction of about 17,000 MW projects.
“At a time when the private sector is investing in the energy sector in this way, the government’s announcement in the budget and programme that PPA will be done on the take-and-pay basis of the run-of-the-river project has blocked the way for the construction of about 17,000 MW projects,” he said.
We believe that this announcement has been made in the budget to eliminate the general energy sector, even though it is clear that banks and financial institutions will not manage finances in the PPA made on the basis of take and pay. This announcement has not only closed the way for the construction of about 300 projects of 17,000 MW, but has also submerged the investment of more than Rs 66.22 billion so far invested by private promoters for these projects. ’
According to Karki, the provision of PPA only in the take-and-pay brought by the Government of Nepal in the budget is not only against the Energy Development Roadmap-2081 with the target of producing 28,500 MW recently approved by the Council of Ministers, but is also a big obstacle in achieving the target of the 16th Five-Year Plan of the National Planning Commission.
According to Karki, this provision of the budget has closed the way for the Government of Nepal to achieve all its objectives and goals, including encouraging the private sector to invest in energy in various public forums, attracting foreign investors and exporting 10,000 MW to neighboring India.
According to him, it is also against the Electricity Act, 2049, Hydropower Policy 2058, Water Resources Policy and Act. We believe that this announcement of the budget has completely ignored the government’s plan to achieve the prosperity of the country through energy development.
The announcement has made the private sector, which has invested more than Rs 1.5 trillion so far and is now bent on investing more than Rs 3 trillion, completely pessimistic.
According to IPPAN, although the hydropower policy mentions to end the monopoly of the Electricity Authority in generation, distribution and transmission in the year 2058 BS, the monopoly of nea has been maintained without fragmentation so far, on the one hand, the private sector should be forced to go to a single buyer without participating in the business by not giving the license of electricity trade and transmission line and on the other hand, the government should announce through the budget that after investing more than 66 billion by giving a license from the Department of Power Development, the government should announce through the budget that it will do only PPA after investing more than 66 billion rupees by giving a license from the Department of Power Development. It’s a grossly anti-region move.
Although the budget had only announced to open the doors of electricity trade to the private sector, the private sector would have been in a position to find the market and do PPA on its own, but without that, such a provision of the budget presented in the parliament to discourage the private sector, which is active in the construction of most ROR projects at the same time, has made the private sector pessimistic.
According to IPPAN Chairman Karki, the private sector promoters feel humiliated by the government. The provision of take-and-pay, which is anti-private sector and eliminates the private sector in the energy sector, should be amended immediately and an environment should be created to do PPA in take-or-pay (take or side) already being done by the Electricity Authority.
Otherwise, he said, the private sector will fight hard against it.
On the other hand, gold and silver traders are also not satisfied with the budget brought by the government. Entrepreneurs have been dissatisfied with the recent provisions made by the Government of Nepal regarding the business of gold and silver and diamond and stone jewelry through the budget statement for the year 2082/83 BS.
Federation of Nepal Gold and Silver Dealers’ Association Acting President Diyesh Ratna Shakya said that although the provision regarding the quantity of gold and gold ornaments brought by ordinary Nepali citizens returning from foreign employment is welcome, some provisions are not in the interest of the entrepreneurs.
According to him, despite opposition from businessmen, serious attention has been drawn to the 2 percent luxury tax imposed on all jewelry and 13 percent VAT on diamonds and precious stones studded ornaments without fixing the limit from this year.
According to Shakya, the new tax structure that the government is trying to implement is sure to add a direct economic burden of 2 percent to 13 percent on consumers, which will add inflation to the market
“The new tax structure that the government is trying to implement is bound to add a direct economic burden of 2 per cent to 13 per cent on consumers, which will add inflation to the market,” he said. At the same time, there is a risk of increasing prices more than the markets of neighboring countries, which will encourage theft and illegal transactions. Since the return sale guarantee is mandatory for the transaction of gold and silver and diamond-stone jewelry, there should be minimal difference in the selling price and purchase price to maintain the market. However, this new tax structure is almost certain to interfere with it. At a time when the rising prices of gold have already brought recession in the gold and silver market, this system of tax increase is sure to create further recession. This threatens to destroy the jobs and livelihoods of millions of businessmen, Kaligarh and labourers. ’
He said that the government should immediately reconsider and abolish the luxury tax imposed on all types of gold and gold ornaments and the value added tax (VAT) implemented on diamond and jewelry.
According to him, acts, rules and policies should be formulated as soon as possible to encourage the trading of gold in the long term, while a detailed study of the far-reaching effects on existing businesses, jobs and markets should be done before changing the tax structure and without that the scope of tax should not be increased.
प्रतिक्रिया दिनुहोस्