India’s obstruction on hydropower projects construction

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In Nepali investment projects, not only the shareholders and directors, but also the directors of the lending banks are demanding three generations with citizenship, but dozens of projects are in trouble because the import of essential explosives has been stopped for 6 months.

Kathmandu – India, which has been keeping a crooked view of third country investment in Nepali hydroelectric projects, has also created obstacles in the under-construction projects of Nepali investment. The Indian Embassy has not issued a ‘No Objection Letter’ (NOC) for the import of explosives essential for the project for six months, the investors are forced to go round the Department of Power Development, Ministry of Home Affairs, Ministry of Defense and the Indian Embassy, ​​but no hearing has been done.

A month and a half ago, during Prime Minister Pushpa Kamal Dahal’s visit to India, his counterpart Narendra Modi announced that India will import 10,000 megawatts of electricity from Nepal in the next 10 years. However, even when Nepalese investors invest in their own country’s water resources, India has adopted a policy of non-cooperation. While the supply of explosives is uninterrupted in Arun III of Indian investment.

India has investments in seven different projects of 4639 MW in Nepal. Arun III of 900 MW is under construction with the investment of Sutlej Jalvidyut Nigam. Similarly, Indian companies have contracted to build 490 MW Arun IV, 669 MW Lower Arun, 750 MW West Seti, 480 MW Phukot Karnali, 900 MW Upper Karnali and 450 MW Seti River-6 hydropower projects. Apart from Upper Karnali, other projects such as DPR are being worked on.

On the other hand, about 500 megawatt projects such as Tanahun Hydropower, Khimti 2nd, Nupuche Likhu, Middle Tamor, Kabeli, Langtang, Lower Ikhuwa Khola, Sanjen, under construction with Nepali investment have been in trouble for months because India has stopped explosives. Due to lack of explosives, the tunnel construction of the 48.8 MW Khimti second hydropower project has been stopped. “Despite sending the complete details, NOC has not been received from the embassy,” says promoter Krishna Acharya, “Investors are in trouble as the embassy does not even give permission for the import of explosives and does not give the reason for it.”

According to Acharya, who is also the former president of IPPAN, the association of independent energy producers, the Indian embassy has asked for the details of the hydropower project’s board of directors, share investors and contractors for the NOC. He says, “Instead of a few days, it has been months, but the embassy is stuck even after submitting all the details.”

According to Rajabhai Shilpkar, the head of the project, there is a problem in not getting explosives for the 140 MW Tanahun hydropower project, which is being built by the Nepal Electricity Authority. The project is under construction with loan support from Asian Development Bank (ADB), Japan International Cooperation Agency (JICA), European Investment Bank (EIB) and additional investment from the Authority. Companies from China and Vietnam are working as contractors. According to the craftsman, India gave explosives for the first package being made by Vietnamese company Song Da and Kalika JV, but India did not give permission to import explosives for the second package being made by Chinese company Sino Hydro. “India has not given any information as to why it has not given permission,” he said. A representative of the contractor company also said that the Indian Embassy had objected to the work being done for the same project, saying that explosives were taken from Package 1 and worked on Package 2.

“This is a project that Nepal is building with a loan, but India is trying to block the contractor, this is strange,” he said.

Project promoters say that while Indian companies can compete like any other country when international tenders are called, they are not enthusiastic, but India’s bias towards the selected companies remains. In Tanahun Hydro, the Indian company JP also came to compete, but at the same time, it automatically withdrew after the bankrupt in India. India has a headache because Chinese companies were selected through open competition. India had refused to supply raw materials even for the 216 MW Upper Trishuli 1 being built by a South Korean company. After the work of the project was stopped, the Korean ambassador met with the Indian ambassador and made a request. After that something has become easier, electricity promoters have expressed concern saying that this level of obstruction from neighboring countries is unimaginable in the development of Nepal.

Promoter TN Acharya says that the 57.5 MW Nupuche Likhu hydropower project being constructed by Vision Energy is also facing problems due to lack of explosives. According to him, the project’s investors and contractors were initially given permission, but that too has been stopped for about 6 months. Even after months of applying for NOC, it has not been received. In case of shortage of explosives, the Ministry of Home Affairs had made a procedure to arrange for the exchange of ammunition between the projects to avoid the immediate problem. However, despite the procedure being published in the gazette, India has written to the Nepalese government not to practice this. Since then, the government of Nepal has not been able to implement its own decision. Ganesh Karki, president of IPPAN, says that many projects being constructed by the Nepali private sector have been stopped due to the obstruction in the import of explosives.

There is also a problem in the construction of the Sabha Khola hydropower project, which is his investment, due to the lack of explosives. “India has not given permission to bring it, it has also caused problems for the projects of Nepali investors, the government should take immediate steps to solve the problem,” he says. Bharat Parajuli, a member of IPPAN, says that none of the projects currently under construction are immune to this problem. He says, “It was the practice of the Nepalese hydropower promoters to give NOC from here when they asked for it. However, now it is being said that ‘Delhi Vezharhehe’ is not given.

The embassy has started asking for detailed information not only of the investors, but also of the owners of the banks that invest in them. Banks have invested in a single project by forming a consortium, now 10 banks have invested and the details of the directors of all those banks have to be submitted to the embassy, ​​but no NOC has come from there. This is a very big deal,” said a promoter.

Investors say that the suspicion that only 1 non-resident investor has shares in the project is also raised by the Indian Embassy. “On the basis that the investor’s son is in the US, details have also been requested about his investment in the US and who are his partners, but the NOC has been stopped,” said an upset investor. Parajuli says that a few years ago, when a hydropower promoter submitted an application to the Ministry of Home Affairs, he was able to get a certificate from there, but even after going to the embassy and submitting all the details, he was blocked. Who is the investment in the project, who is in the board of directors? “The embassy keeps the information about who will build the transmission line, but they don’t give NOC,” he says.

India initially started the blockade of explosives to disrupt the Kathmandu Nijgadh ‘fast track’. Although the explosives for the fast track will be manufactured by the army, the raw material will come from India, earlier there was some delay in the raw material. While the contractor in Fast Track is a Chinese company, the investment belongs to the Nepalese government.

Earlier, the army used to sell explosives to private sector projects as well. However, due to the delay in the import of raw materials from India, the army’s production has also been affected. Balram Khatiwada, general secretary of IPPAN, says, “Even the army has not been able to provide explosives due to the lack of raw materials, which has put the promoters in a bigger problem.Krishna Prasad Bhandari, information officer of the Nepal Army, said that due to shortage of raw materials, the emulsion plant of the Nepal Army is operating only in emergency situations. It is not closed with full stop. There are raw materials that meet the urgent needs.

The production according to the capacity of the plant has not been done. However, the demand of hydropower producers could not be met, he said. It is not that there is no initiative to bring explosives from China. However, the businessmen have not been able to continue due to the high cost. Investors say that importing explosives from India will get SAFTA concessions and import from China will not, so the cost will be doubled. However, the promoters are worried after India ignores the rights of Nepal as Kshatriyas.They met Prime Minister Pushpa Kamal Dahal last week but have yet to get a concrete commitment. “We have asked India to trust the Nepalese government and the Nepalese army to provide explosives as before. This problem will be solved soon,” the promoters say, even though the Prime Minister said this, no initiative has been taken.

On the other hand, the spokesperson of the Ministry of Energy, Madhu Prasad Vetuwal, said that the government is confident that the problem will be resolved because of negotiations at various stages. This issue has been raised in secretary-level and ministerial-level dialogues, the Prime Minister also raised this issue during his visit to India. Therefore, we are confident that the problem will be solved soon.

Nepali officials did not want to reveal what the response from India has been. When Kantipur contacted Sahil Kumar, spokesperson of the Indian Embassy in Kathmandu, he did not want to comment on the matter.

Source : Kantipur