Amendments sought on Upper Karnali PDA

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    Power development agreementsKATHMANDU, SEP 17 – With Investment Board Nepal (IBN) struggling to get political endorsement for power development agreement (PDA) of Upper Karnali Hydropower Project, Jatsrot Vikas Sanstha (JVS), non-governmental organisation, has sought a number of amendments in the PDA document.

    Issuing a statement on Tuesday, JVS has stated that provisions in the PDA documents are against the spirit of memorandum of understanding (MoU)that the government signed with India’s GMR-ITD Consortium in 2008.

    The statement, according to JVS, was issued after consultations with former water resource ministers, secretaries and political leaders. The organisation has claimed that provisions on force majeure have put more liability on the part of Nepal government even in the case of situations which are beyond control.

    It has also reservation over incentives and tax exemption given to the developers as mentioned in the PDA documents. “There is no rationale behind providing incentives and tax exemption basically meant for domestic projects for export oriented projects,” reads the statement.

    JVS has also reservation over land acquisition provision mentioned in the PDA as well as direct agreement provision. “The government should enter into agreement with institutions that provide loan to the developer and not bear the liability,” reads the statement.

    IBN, however, says since the PDA will replace the MoU, it is natural to have changes in the PDA.

    The IBN officials say, since the lender while signing loan agreement with the developer seeks guarantee from the government as well, it is natural that the government comes into the agreement.

    “The lenders will only come in, if risk is mitigated or equally distributed,” said IBN official. With earlier board meetings of Sunday and Monday ending inconclusively, the IBN board is scheduled to meet on Wednesday over Upper Karnali PDA.

    Source : eKantipur