Another parliamentary committee summons CIAA

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    CIAAKATHMANDU: Another parliamentary committee has summoned the Commission for the Investigation of Abuse of Authority (CIAA) to clarify the basis on which it instructed the Ministry of Energy (MoE) to revoke survey or electricity generation licences of at least 11 hydroelectric projects.

    The committee on agriculture and water resources has directed CIAA, along with the energy minister and secretary, to be present at its meeting scheduled for Friday.

    Earlier on Sunday, lawmakers had raised the same case during a meeting of the parliamentary committee on finance, following which CIAA Chief Commissioner Lokman Singh Karki was summoned. He is expected to appear at the finance committee’s meeting scheduled for tomorrow.

    The parliamentary committees have currently been critical of the CIAA after the corruption watchdog issued instructions to cancel survey or electricity generation licences of World Bank Group-supported Kabeli-A hydroelectric project and at least 10 other hydro projects.

    The CIAA had directed MoE to terminate these licences citing the project developers had failed to complete detailed survey reports of projects, conclude power purchase agreements (PPAs) or reach financial closure within the deadline extended to them.

    The commission had previously said ‘it won’t allow companies to continue holding various hydro licences, while the country reeled under the problem of loadshedding’.

    But lawmakers have lately started questioning whether the commission, which was formed to launch investigation into corruption cases, was authorised to issue orders to government agencies.

    “All government and constitutional bodies should perform their duties by remaining within their boundaries. Problems could arise if they cross the borders,” Energy Minister Radha Kumari Gyawali told the meeting, asking the CIAA not to interfere in matters related to the state’s executive body. “If licences have to be cancelled, we will take the decisions on our own.”

    She further said that unnecessary intervention of the CIAA in hydroelectric projects would only prolong loadshedding, affecting economic development of the country.

    “We all know that the country is reeling under power cuts of up to 12 hours per day. We also know industries here are suffering due to lack of power. Against this backdrop, interference in generation of electricity would only push the country backward,” the minister said.

    Many project developers, whose licences are at the risk of being revoked, have complained that they have already spent millions on the projects and it would be unfair if the energy ministry heeded CIAA’s call.

    For instance, developer of Kabeli-A project has already spent Rs 540 million on the project. Similarly, developers of Upper Khorunga hydroelectric project have completed most of the processes to begin construction and are all set to sign PPA with Nepal Electricity Authority.

    “The CIAA seems to have issued instructions by simply checking whether project developers met targets, such as signing of PPA and financial closure within the deadline. It did not consider investment made by project developers, progress made in signing PPAs or reaching financial closure and sincerity of investors in completing projects,” Energy Secretary Rajendra Kishore Kshatri told the parliamentary committee.

    Sealing the power purchase deal with NEA and reaching financial closure with banks are generally lengthy processes, as they include numerous rounds of negotiations.

    “Banks generally do not want to extend credit unless there is certainty about construction of transmission lines. They want assurance that power generated by developers does not go to waste. However, due to dearth of transmission lines and uncertainty on construction of such lines, negotiations with banks end inconclusively, delaying the process of achieving financial closure,” General Secretary of the Independent Power Producers’ Association Nepal, Kumar Pandey, said.

    The CIAA should have, thus, consulted with all stakeholders prior to issuing the orders, Kshatri informed.

    Source : The Himalayan Times