The government is planning to hand over the 39 MW multifuel plant in Duhabi, Morang to the private sector on a management contract. Constructed in 1997, the plant is owned by the Nepal Electricity Authority (NEA).
On Thursday, the Energy Ministry formed a five-member committee with Kush Kumar Joshi, former president of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI), as coordinator to study the viability of the project. The committee includes representatives from the NEA, the Department of Electricity Development (DoED) and the Finance Ministry.
Some six months ago, industrialists in the Eastern Region had urged Prime Minister Baburam Bhattarai to hand over the management of the plant to the private sector.
An official at the Energy Ministry said that as the government has not been able to operate the plant effectively, it would be better to hand it over to the private sector. “At a time when industrial production in the Morang-Sunsari Industrial Corridor has been declining due to a power shortfall, the private sector will fully utilise the plant,” he said.
Another ministry official said that there was no alternative to transferring the plant’s management to the private sector as its cost is higher than its output. There are two multifuel plants in the country, a 39 MW plant at Duhabi and a 14.4 MW plant in Hetauda.
“We are discussing the modalities of handing over the plant and ways of management and also doing a cost-benefit analysis,” Joshi said. “We will submit our report within a week.”
Anup Kumar Upadhya, joint secretary at the Energy Ministry, said that once the committee presents its report, the ministry will make a concrete move.
The multifuel plant at Duhabi consists of six units each with a capacity of 6.5 MW. Four out of the six units need serious repairing. “The plant is being fixed up and will be ready to resume operation within four months,” added Joshi. Wartsila Company of Finland has been doing maintenance work at the plant with a grant from the World Bank. The World Bank has provided about Rs 400 million to restore the plant to its full capacity. Local industrialists said that the industrial corridor requires 150 MW but the available energy amounts to only 75 MW.
“The energy produced by the plant will be supplied exclusively to the industrial corridor,” said a member of the committee, “The additional supply of 39 MW will help minimise the load-shedding by more than 50 percent.” However, no such management plan has been made with regard to the 14.4 MW multifuel
plant in Hetauda.
