KATHMANDU, Aug 1
There is uncertainty about the status of commoners who have invested in hydropower companies when the projects are handed over to the government after a certain period with the government and the regulatory body not formulating clear legal provisions.
The Electricity Act requires all the hydropower projects to be handed over to the government in an operational state after a certain period. The act states that project that exports electricity abroad has to be handed over in 30 years and that for domestic consumption in 35 years but it is silent about the status of the investors after the project is handed over to the government. Securities Act is also silent about the issue. The general public has lately started to invest more after finding the hydropower sector lucrative. Hydropower companies are collecting billions of rupees from the public to construct over half a dozen big projects.
Director at the Securities Board of Nepal (SEBON) Niraj Giri stated that there are no laws defining the status of the general public and promoters after the project is handed over. “Though this provision will not be needed for another two decades, the government must be clear about security of investment in the long term. It is time for the government and board to think about it,” he said. Share analyst Rabindra Bhattarai states that the status after the license expires has to be clarified while inviting investment. “All the hydropower companies issuing shares are cheating by not clearly informing the general public about the time period of the shares. SEBON must be strict about this,” he said and argued that the companies should not be allowed to issue shares without making the status of shares after 35 years clear. He advised that the companies must inform about the share ownership after the project is handed over at the time of issuing shares.
President of Arun Valley Hydropower Company Limited Guru Prasad Neupane stated that the government must make the status of investors clear after receiving ownership of the project. “Only the company will remain after the project is handed over to the government. The project is the income source of the company and when the project is gone there is no status of the company and the investors. The company, therefore, must build another project to establish ownership of the investors,” he reasoned. Stating that the promoter company should not be dependent on just one project he added, “There should be a provision to make it mandatory to invest the amount received from depreciation every year on other projects.” He revealed that Arun Valley is preparing to construct Ridi, Kaveli B, and Upper Piluwa projects for security of investment. “We have provided 51 percent shares to the investors and raising just the remaining 49 percent from the promoters,” he added.
Joint Secretary at the Energy Ministry Anup Kumar Upadhyaya, concurring with Neupane, also stated that the status of the company and investors both will end after 35 years if the company is dependent on only one project. “The company must build another project to ensure investment security after the project is handed over. The government should also make clear legal provisions about investment of the general public,” he added. Proposals for Rs 140 million were received when Sanima Mai Hydropower Limited recently issued shares. It had not informed the investors about the status after 35 years while issuing shares. General Manager of Sanima Mai Dr Subarna Das Shrestha also conceded that there is no legally clarity about the security of investment of the general public after 35 years. He revealed that the power producers have started discussions about the issue. Stating that it can create problems in future he said the government and SEBON must make it clear soon.
Butwal Power Company Limited, Chilime Hydropower Company Limited and Arun Valley have also not informed the general public about the issue. Share price of Chilime, Butwal Power, and Arun Valley is high, unlike that of National Hydropower Company Limited, and they have been providing handsome returns to the investors every year. Promoters have been collecting money from the public to construct hydropower projects in recent times. Upper Tamakoshi, Mid Bhotekoshi, Rasuwagadi, Sanima Mai and Arun Kaveli Energy Limited are collecting billions of rupees from the commoners.
Source : Karobar Daily
Photo :China Daily