In 17 years one power company has achieved remarkable gains to push forward in Nepal’s increasingly competitive energy market.
At a time when Nepal is observing rapid progress in hydropower development, one 17 year old company has been helping the country in its drive to electrification. Established in 2000, Cosmic Electrical Engineering Associates has become a reputed name in the electric power system service business. An ISO 9001:2015, ISO 14001:2015, OHSAS 18001:2007 company, Cosmic mainly deals in areas such as transmission lines, distribution lines, sub-stations and electrification. With a slogan that says “Building a Strong and Reliable Grid”, the company also works in the area of switchyards and provides maintenance services. “Our core corporate values are our commitment towards services, discipline at work, innovation, honesty, safety and health,” says Er Mahesh Mahato, managing director of Cosmic Electrical.
After completing his Bachelor of Engineering in 1992, Mahato worked in an architectural and engineering firm for couple of years. His passion and an entrepreneurial spirit always motivated him to work harder. “Observing the future prospects in the electric power sector, I started my own business,” he mentions. Lack of financial resources didn’t stop Mahato from realising his business dream. In 2000, he started Cosmic Electrical with just a computer and a bare room. Mahato singlehandedly operated the company for the next three years.
During the early years, Cosmic Electrical was basically a consulting firm. Realising the need to get into other areas of the power business, the company, in 2004, started providing turn-key solutions for electrification projects from conception to completion. “We added designing and installation of electric systems in buildings,” he informs. At that time, only foreign companies used to provide such services. Similarly, in 2007 the company took up an international partnership for quality enhancement and knowledge transfer. “We joined hands with the ABB Group of Switzerland. The Swiss firm is among the top global companies in energy sector,” states Mahato.
Furthermore, the company started working on rural electrification in 2008. On its way to expand its services and achieve higher business growth, Cosmic Electrical successfully bagged a global tender from United Nations Development Project (UNDP) worth Rs 130 million. “Our annual turnover was hardly Rs 30 million at that time. We were awarded the project because our technical and financial proposals were the most viable,” he says. The UNDP tender was for an electrification project in the Khimti area and Cosmic successfully completed the work in time. According to Mahato, the project success was one of the major turning points for the company. “It largely helped to enhance the company’s capacity,” he says.
In 2010, Cosmic Electrical began working on electricity distribution network solutions. After 11 relentless years of quality service and management, the company received the ISO 9001:2008 certification in 2011. 2012 saw the company stepping into providing services to electric sub-station projects. “In 2013, we started operating electric transmission line infrastructures and sub-stations up to 400 KV as an EPC contractor,” says Mahato. It was a Nepal Electricity Authority (NEA) project funded by the Asian Development Bank (ADB). The project was completed well before the deadline despite the mounting problems created by the earthquake and border blockade. “We created history at that time by concluding the project before the stipulated time,” he shares.
In the same way, Cosmic Electrical started working on transmission lines in private power sector projects. “We successfully bid for the 220 KV Trishuli Transmission Line Project. The company has successfully executed 32kV Transmission Line Project for Lower Hewa hydroelectric project. Meanwhile, the company has been working on different private sector hydropower projects in the Panchthar district, namely 132 kV Transmission Line Project for Mountain Hydro. Similarly, the company is engaged in the 132 KV double circuit project of Lower Solu at Solukhumbu in association with GE Power. Cosmic Electrical has also been providing technical and engineering support to the Rastriya Prasaran Grid Company Limited, a new government undertaking established in 2015 for the development of transmission lines as a part of the unbundling of NEA.
In 2016, the quality management certification of Cosmic Electrical was upgraded from ISO 9001: 2008 to ISO 9001:2015. In 2018 February, the company received ISO 14001:2015 (Environmental Management System) and OHSAS 14001:2007 (Occupational Health & Safety Management System) certifications.
Engineering and Management
Mahato who originates from Mahottari district has worked relentlessly to establish Cosmic Electrical as a major force in the power system solutions business. “It was a very different time for being a startup in 2000 in Nepal. Unlike today, the business ecosystem wasn’t supportive environment for startups,” he shares, adding, “I gained experience through the ‘learning-by-doing’ approach.” As Cosmic Electrical was moving ahead diversifying its business in the power and real estate sectors, the company faced huge business losses due to lack of management skills among the people in leadership positions. Management know-how became important and Mahato joined an EMBA programme. “After the completion of my EMBA, a feeling came to my mind that the losses could have been averted if I had joined this programme earlier,” he says.
Cosmic Electrical has envisioned itself as being among the top three companies in power system solutions business by 2020. The company has been expanding its investment portfolio in different areas in order to achieve this. Similarly, the company’s focus has been on the timely completion of projects and maintaining quality work to meet the target. “We are working hard to meet the target of Vision 2020. We are always committed in terms of protecting the environment and occupational safety and health,” he mentions.
The recent years have seen Cosmic Electrical getting into strategic partnerships with international companies. “We have partnered with the US multinational firm General Electric (GE) for transmission line infrastructure development projects,” Mahato says. He hopes that partnerships with international companies like GE will have a good impact on Cosmic’s business and also on the learning-by-doing approach of the company.
Taking this a step further, Cosmic Electrical plans to become the number one Nepali company in power system solutions by 2025. “We are hopeful that the strategies will help us to meet this target,” he comments.
The company has been providing services to a number of big clients in different sectors including hydropower, healthcare, hotels and education. Nepal Electricity Authority, Khimti Neighborhood Development Project, Patchthar Hydro, Mountain Hydro Nepal and Upper Tamakoshi Hydroelectric Project are some of the major clients of Cosmic Electrical. Meanwhile, the company has provided electrification services to institutions including Ncell, Hotel Radisson, Imperial Developers, Varun Developers, Kathmandu University, BP Koirala Institutes of Health Sciences and Paropakar Maternity and Women’s Hospital.
Currently, Cosmic Electrical is working on NEA’s rural electrification project in seven different districts. According to Mahato, the project has reached the final phase. Similarly, the company is working on a 132kv transmission line of Mountain Hydro Nepal.
Cosmic Electrical Engineering Associates holds a market share of around 30 percent at present. “Our share of the market will increase to 40-50 percent by 2020,” says Mahato.
Mahato sees heated competition in the power system solutions business. “The competition is mainly with foreign companies in the bidding process. It is where our efforts in institutional capacity enhancement become much more important which we have been trying to do over all these years,” he stresses.
Cosmic Electrical is in the process of establishing a subsidiary which will work as a supporting partner for startup businesses. The new entity which will be named Cosmic Alliance aims to help the growth of startups through equity funding, venture capital investment and mentorship. “We are working on it, and hopefully the company will begin operations from next year,” says Mahato. Cosmic Alliance will focus on startups and private equity. “Cosmic Alliance is my long term vision,” he mentions.
Cosmic Electrical has employed around 100 people while 1,000 are indirectly engaged with the company. According to Mahato, employee retention has become a tough job to do for domestic employers. “A high number of young people are attracted to jobs abroad at present. Similarly, many switch their jobs after gaining experience and exposure,” he says.
The company engages in CSR activities on regular intervals. Many of its CSR undertakings are also focused on supporting young entrepreneurs. “We conduct free mentorship sessions for aspiring entrepreneurs on weekly basis,” Mahato informs. “We also visit colleges and interact with students to help foster their entrepreneurial aspirations,” he adds.
Weakness/Areas Need to Improve