Greater loss for Nepal in lack of PTA

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    KATHMANDU, July 27

    PTA-1Expansion of hydropower projects in Nepal has been deferred for now in lack of the much-awaited Power Trade Agreement (PTA) with India due to conflict among political parties, weak government preparations, poor health of Prime Minister (PM) Sushil Koirala and increasing anti-India sentiment.

    Dozens of domestic and foreign investors are disappointed as the issue of PTA will not even make the list of Indian PM Narendra Modi’s agenda during his Nepal visit next week. Stakeholders feel that Nepal will suffer more losses than India in lack of PTA. The PTA between the two countries could not be signed even this time after energy secretaries of the two countries failed to sign the preliminary agreement. The process has been stalled as the cabinet did not give permission to Energy Secretary Rajendra Kishore Chhetri to go to New Delhi to sign PTA after forging consensus. The secretaries were to sign the preliminary agreement after deciding on the PTA drafts proposed by both the countries, as per the schedule. Secretary Chhetri was set to go to New Delhi on July 20 as per that schedule.

    The cabinet had decided to move discussions about PTA forward only after return of PM Koirala after different suspicions were raised about PTA proposed by India. The meeting between three main parties on Friday also had decided to move the issue forward only after further study citing lack of adequate preparations. The issue of PTA has now become uncertain as it has not been agreed in a long time. Nepal had first sent draft of PTA to India in 2010 and India had sent its draft in March.

    Nepal will struggle to attract foreign investment in hydropower sector in lack of PTA while big projects may not be developed. Two Indian companies preparing to construct three big projects in Nepal have already been given assurance by the Indian government that electricity generated by them will be imported. Indian Energy Ministry has given permission to GMR Energy Limited and Sutlej Hydropower Corporation that electricity generated by Upper Karnali (900 MW), Upper Marsyangdi II (600 MW) and Arun III (900 MW) projects—with combined installed capacity of 2400 MW—can be imported from Nepal during the license period. GMR and Sutlej now can export electricity from Nepal even without PTA between the two countries. Lanco Energy, Patel Engineering, Bhilwara Energy and all other Indian companies will also now be able to export electricity from Nepal without any difficulty.

    But promoters from Nepal, China, Norway, Brazil, South Korea and other countries must wait for PTA to sell electricity to India. The projects to be developed for export will not get market in lack of PTA with India. These projects may not even be constructed if the market is not certain. Spokesperson at the ministry Keshav Dhwaj Adhikari stated that PTA could not be signed this time as the process to sign the preliminary agreement after agreeing on the drafts proposed by both the countries could not move forward.  “The process could not move forward after the secretary’s visit to India was cancelled and the issue of PTA was not prioritized during the Nepal-India Joint Commission meeting held in Kathmandu on Saturday,” he added. The two countries had prepared, according to him, to sign PTA at ministerial level during the visit of Indian PM Modi after secretary-level agreement.

    “PTA could not be signed as Nepal did not want to. We had done full preparations from our side while India was also positive but the stakeholders did not help and PTA could not be signed,” an official who participated in the Joint Commission meeting elaborated. The official clarified that PTA will not be signed even during Modi’s visit due to lack of time.

    The Foreign Minister level Joint Commission meeting, that concluded on Saturday, has agreed to make a joint committee of Nepali and Indian energy ministries for PTA. The meeting also decided to form a five-member Eminent Persons Group (EPG) in respective countries and prepare a report to make necessary recommendations to the governments for review of the Peace and Friendship Treaty of 1950, inject pace into Pancheshwor Project, and assist in mid-hill highway. Foreign Minister Mahendra Pandey and his Indian counterpart Sushma Swaraj had signed on an agreement to move forward further strengthening the bilateral relationship between the two countries.

    President of the Independent Power Producers’ Association, Nepal (IPPAN) Khadga Bahadur Bista said big projects will not be developed without PTA with India. “Indian companies do not need PTA. But Nepali and other foreign investors need PTA. We are doomed otherwise,” he warned. He urged the government to immediately move the process for PTA forward.

    Sign PTA immediately

    The Agriculture and Water Resources Committee of the parliament has directed the government to immediately sign PTA with India. The meeting of the committee on Sunday has directed the government to sign PTA in national interest by paying attention to the country’s necessities. Lawmakers participating in the meeting had argued that PTA is necessary to attract foreign investors as economic development of the country is not possible without energy. Energy Minister Radha Kumari Gyawali stated that she is committed to signing PTA in Nepal’s interest.

    Source : Karobar Daily