Deadline for Upper Trishuli-1 extended

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    KATHMANDU, Nov 14

    trishuli-1The government has again extended the license for the 216 MW Upper Trishuli-1 Hydropower Project by a year violating the Electricity Act and the contract agreement. The cabinet meeting on Thursday has again extended the deadline against the contract agreement giving a year to the Nepal Water and Energy Development Company for arranging financial resources.

    The stakeholders have accused the government of policy corruption by extending the deadline at a time when everybody is focused on the Constituent Assembly (CA) election. The government has extended the deadline by interpreting clause 35 of the Electricity Act. The license of Nepal Water is valid only for the next five months as per the contract and the project will come back to the government’s basket after that. Energy Minister Uma Kanta Jha stated that the deadline has been extended for a year for financial arrangement as Nepal Water has some work to do but refused to comment about the provision in the contract.

    Nepal Water and the Energy Ministry had signed a 21-point contract agreement in October 18, 2012 that mentioned that financial arrangement should be done within a year and the track for road to reach the project site be completed within eight months. But Nepal Water has yet to complete financial arrangement and opening the track a year on. Work has been done in only two kilometers though a 12-km track had to be opened from Mailung of Rasuwa to Baluwaphant.

    The contract is automatically terminated and the project comes back to the government’s basket, as per the contract agreement, if the promoter fails to complete the scheduled work. The ministry in June had revoked the license of Nepal Water for Upper Trishuli-1 as per clause 5 of the Electricity Act. The then prime minster Baburam Bhattarai had reinstated the license following intense pressure from the International Finance Corporation (IFC) under the World Bank (WB). The Economic and Infrastructure Committee under the cabinet had given the license keeping conditions that the Power Purchase Agreement (PPA), financial arrangement and physical works should be done within one and half years following pressure from the South Korean Embassy in Nepal and IFC.

    Officials at the law and energy ministries had argued that the license should not be reinstated as giving it back to Nepal Water would set a bad precedent and those staying idle occupying the license would be encouraged leading to open business of license. But the committee had reinstated the license ignoring the advice of top officials.

    The Snowy Mountain Energy Corporation (SMEC) had occupied the license for West Seti reservoir based project for 16 years demanding time for financial arrangement and PP. Officials at the ministry predict similar fate for this project.  There is no immediate chance for PPA with the Nepal Electricity Authority (NEA) as Nepal Water has proposed it in dollars and at a higher rate than other projects. The company had received survey license from the government in January, 2007.

    Source : Karobar Daily