Hydropower dev in a shambles

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    DEC 20 – – After having invested Rs 320 million, an Indian investor decided not to build the 50MW Upper Balefi Hydropower Project. The decision followed several interventions from local residents.

    – Under-construction 22MW Upper Chaku hydro project has been compelled to appear before the court for a hearing following a writ filled by the locals, claiming compensation for land acquired to construct a road by local government bodies.

    – Energy generation of the 45MW Bhotekoshi Hydropower Project has stopped after locals obstructed reinstallation of transmission line towers, demanding shares in the project. The project is incurring a daily loss of Rs 8.6 million.

    – Local political leaders and cadres recently attacked 102MW Madhya Bhotekoshi Hydropower Project for the Chinese contractor’s failure to award petroleum supply contract to local firms.

    – Bank staff and project officials were forced to run away from the project site after local gangsters tried to attack them while on their way to the 3.2MW Golungkhola hydropowerProject last week.

    These are a few examples of obstructions faced by hydropower investors. The trend of hindering hydropower development in Sindhupalchok district started in the late 90s, amid the Maoist insurgency. And now, it has become a tradition. Even lawmakers are involved in obstructing work.

    An investor complained developing a hydropower project has become like committing a crime nowadays. “It is difficult to distinguish between cadres of ruling and opposition parties as even those of ruling parties attack the projects,” said Khadga Bahadur Bisht, president of Independent Power Producers’ Association Nepal (IPPAN). “Lawmakers themselves are in militant mood.” Developers were attracted to the district because of its close proximity to Kathmandu, the country’s top electricity consumer, requirement of low investment in road with Araniko Highway already in place, and comparatively easier access to project sites.

    “The district has immense potential. But investment may decrease in the days to come if the situation continues,” said Umesh Kasaju, president of Shiva Shree Hydropower Company.

    The 17th District Council meeting last year adopted a slogan “Sindhupalchwok Sambriddhi ko Aadhar – Jalshrot, Paryatan, Krishi ra Byapar” (Foundation of Sindhupalchwok’s Prosperity: Water resources, Tourism, Agriculture and Business). Parties had promised they would bring in large scale investment as they signed to the commitment in 2011.

    However, the same parties, along with some other non-political forces, are discouraging investors. Nepal Electricity Authority (NEA) Managing Director Mukesh Kafle said all the stakeholders should act to resolve this problem. “A single agency cannot solve the problem,” he said.

    Based on the number projects that have acquired license or have applied for the same with Department of Electricity Development (DoED), the district has potential of generating 1,300MW electricity. As of now, it generates just 75MW from eight projects.

    The District Development Committee (DDC) earns Rs 21.5 million in royalty on an annual basis from hydropower projects.

    Under-construction 22MW Upper Chaku, 102MW MAdhya Bhotekoshi, 18.5MW Lower Balefi, 10.5MW Balefi A, 4.5 MW Lower Indrawati and 3.2MW Goldhunga projects have already reached Power Purchase Agreement (PPA) with NEA.  A recent study has shown 200MW energy can be extracted from Balefi alone.

    Projects with a combined capacity of 162MW are currently under construction. “Investment worth Rs 30 billion is required to complete these projects,” Kasaju said.

    Until recently, there was no problem with Bhoteskoshi. After one and half decades of its operation, political parties, in the name of locals, have started demanding shares in the project. Mohan Basnet, a Nepali Congress lawmaker from Sindhupalchok, is in the forefront demanding the shares.

    After the Sunkoshi havoc in August, ruling parties including NC, CPN-UML, and opposition parties—UCPN(Maoist), and Rastriya Prajatantra Party-Nepal (RPP-N) and CPN-Maoist—have been intervening the repair work on transmission lines.

    There is a competition among parties to demand higher shares. NC has been demanding at least 10 percent, while others seeking up to 35 percent. The project’s developer has said locals cannot demand shares as there is nothing written as such in the project agreement.  Allocating share to locals is a relatively new trend in the country.

    Local leaders last week vandalized a tanker supplying petroleum products to Madhya Bhotekoshi Hydropower project, for the contractor’s failure to award fuel supply contract to local firms.

    Source : eKantipur