Govt fails to fast-track Upper Marsyangdi license

upper-marsyangdiKATHMANDU, April 25: The government has not been able to fast track the generating license for the 600-megawatt Upper Marsyangdi hydropower project although Himtal Hydropower Co, Ltd., a subsidiary of Indian infrastructure developer GMR, applied for the license before its survey license expired a couple of months ago.

Himtal had applied for the generation license through the Investment Board of Nepal (IBN), the high-level government body assigned to facilitate development of large scale projects, when the survey license was still valid.

“We have not received approval from the government for the generation license,” D K Singh, general manager of Himtal, said. However, he declined to say anything further, citing a privacy protocol he has signed with IBN. “You better contact officials at the GMR office in India or IBN itself,” he said.

IBN has rather asked Himtal to sign a project negotiation agreement (PNA), which guarantees the developer´s commitment to completing the project development agreement (PDA) within one-and-half years of the signing of the PNA. “Himtal (GMR) has not signed the PDA so far,” a source privy to developments told Republica.

Himtal General Manager Singh refrained from commenting on the PNA signing. “Perhaps the PNA is currently under discussion at the board of directors of GMR,” the source further said. However, Republica´s efforts to elicit any comment from IBN were futile as Radesh Pant, chief executive officer at IBN, did not respond to repeated attempts to contact him.

Meanwhile, officials from the Department of Electricity Development (DoED), which issues licenses to power developers, said that GMR itself doesn´t want a generation license without first finalizing the PDA negotiations. “The developer wants to finalize the PDA deal before seeking a generation license,” Gokarana Raj Pantha, senior divisional engineer at DoED, said. “GMR is looking to finalizing the PDA deal since that will help them generate financing for the project.”

IBN, which is developing the PDA template — a standard basis for PDA negotiations for hydropower projects above 500 MW capacity, already approved additional investment from Rs 450 million to Rs 1.9 billion in December 2012.

Additionally, the government has granted permission to start land acquisition verification (LAV) at the project site in Lamjung and Manang districts. It has also approved the environment impact assessment (EIA) report prepared by the developer.

The government has awarded the project to Himtal under the build-own-operate-transfer (BOOT) format.

Source : Republica