India wants to include generation in PTA

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    KATHMANDU, Aug 30

    PDA+PTAIndia has taken a stand that the issue of electricity generation should also be included even though Nepal has proposed power trade agreement (PTA) including only transmission and distribution.

    Replying to the draft sent by the Energy Ministry on August 1, India has asked to include generation even though the draft sent by Nepal has mentioned to include only transmission and distribution stating that generation is a separate issue. There may well be no PTA should Nepal and India both stick to their respective stands on the issue of including generation. Nepali political parties and bureaucrats are not willing to include the issue of generation in the proposed PTA fearing that there may be dispute in ownership of water resources if generation is linked with trade. The Nepali side is reluctant to link generation with trade fearing that India may ask for the rights to take the tailwater to India.

    PTA could not be signed in 1997 when both power trade and generation were kept in the same basket. Implementation was blocked after the then parliament refused to approve the PTA citing linking of generation to the PTA. The countries had agreed to sign PTA within six weeks during the recent Nepal visit of Indian Prime Minister Narendra Modi, and there is just two weeks remaining for end of the deadline.

    Similarly, India has also pointed that discussion with Bangladesh and Pakistan, with whom Nepal has proposed for trade of electricity via India, is also necessary to reach conclusion on the issue of power trade with a third country through India. Bangladesh has already expressed commitment to procure 5000 MW of electricity from Nepal. Energy Secretary Rajendra Kishor Chhetri is going to New Delhi on Wednesday leading the Nepali team for dialogue on PTA. There will be three stages of dialogue until Friday during Chhetri’s India stay. The rights of the team have yet to be determined.

    The political team including Finance Minister Ram Sharan Mahat, CPN-UML Vice Chairman Bhim Rawal and UCPN (Maoist) leader Narayan Kaji Shrestha had prepared the draft of PTA following widespread opposition of the draft proposed by India. The Energy Ministry had sent the final draft to India on August 1 after the three major political parties agreed on that. Secretary Chhetri has been expressing dissatisfaction at the setting of limits for the negotiation team by the three parties.

    The Indian Energy Ministry has already given permission to promoter of Upper Karnali GMR Energy Limited and that of Arun III Sutlej Hydropower Corporation Limited to sell electricity generated in Nepal to India, and PTA is necessary for projects developed by non-Indian promoters to export the generated electricity to India. Indian companies have received generation license for projects with combined installed capacity of 6000 MW out of that issued for generation of 13000 MW in Nepal. Investment is expected to arrive only after signing of PTA. PTA will end trade of power at the government level only and it can be done with around half a dozen power trading companies like Tata, Reliance and others instead of just depending on Power Trading Corporation Limited.

    Nepal has proposed PTA for 25 years and it can be reviewed after that depending on necessity. Nepal has strongly raised the issues like being allowed to trade power without any discrimination, no imposition of tax, customs and quotas on trade of electricity, and easy export of power to the third countries through India in the draft proposal. India has currently stopped the customs duty of IRs 2 per unit levied on electricity imported from Nepal.

    Source : Karobar Daily