The Investment Board Nepal (IBN) formed to attract foreign direct investment (FDI) in big proportion has finally been targeted by the government which is cutting its power citing failure to work effectively. Different ministries were already against the IBN feeling it has eaten away their jurisdiction. Draft of a bill to cut power of the IBN has finally been prepared under pressure from those ministries.
The government has opted for an indirect route for cutting rights of the IBN. It has been proposed through the bill for Energy Emergency being prepared by the Energy Ministry. The IBN currently has been helping in arrangements of capital for hydropower projects bigger than 500 MW, provide necessary technical help for that, signing project development agreement (PDA) and issuing generation license and doing other works. The proposed bill will limit its role to just making arrangements for domestic and foreign investment to develop projects.
The proposed bill states that engineering and other technical works, PDA, purchase and sale and all other works will be done by the Energy Ministry. The IBN has already approved foreign investment worth Rs 625 billion for 10 projects including that for hydropower, cement and waste management. A few projects out of them have even brought investment.
Joint Secretary at the ministry Dinesh Kumar Ghimire claimed that the rights of IBN have been cut for failing to work effectively. “The IBN neither built technical capacity nor could it work effectively. We are cutting its rights and transferring those to the ministry after its poor performance,” he added. But the ministry also does not have any action plan on how it will build its own capacity after receiving those rights.
He revealed that the ministry is preparing to table the bill at the parliament. He stated that the bill has been prepared in a way that the ministry will do all technical works of projects bigger than 500 MW, procurement and sale of electricity, PDA and others. Stating that the IBN has not done anything apart from PDA with Upper Karnali and Arun III, he added that the IBN failed to move the project forward even two years after signing PDA.
Under Secretary at the IBN Sanjay Dhungel accused the ministry of usurping IBN’s rights in the name of making its mandate clear. He added that the ministry wants to look at implementation as the IBN cannot reach the lower level. The ministry had repeatedly tried to usurp the rights of moving projects bigger than 500 MW forward even earlier. The IBN is currently doing homework to attract investment for five big projects with combined installed capacity of 3800 MW. It has also moved forward projects including chemical fertilizer factories, waste management plant and cement factories.
The IBN Act states that projects with investment of more than Rs 10 billion must be moved through the IBN. The relation between the IBN and ministry has been frosty right from the time of its establishment. The IBN has been accusing the ministry of not cooperating in moving projects like West Seti forward. It has always blamed the ministry of treating it as a competitor.
Result of cutting rights
The IBN formed by the Baburam Bhattarai government has approved foreign investment of Rs 625 billion to develop 10 projects within five years. Three of those projects are hydropower, two waste management plants and five cement factories. IBN officials feel that the government never wanted to make the IBN technically capable and it has suffered technically as a result. There can be uncertainty about projects that got permission through the IBN once the rights are cut.
Source : Karobar daily
