• Scheduled court hearing on case postponed • Business fraternity says power plant in Nepal’s interest
KATHMANDU: Domestic and foreign investors eying the country’s hydropower sector are leery of the prospects of hydropower development in Nepal, as the fate of the 900-megawatt Upper Karnali hydel project hangs in the balance.
Today’s hearing on a case filed against the project developer was supposed to clear the air, but the proceedings were postponed. “The case could not be heard today because other cases consumed too much of court’s time,” Supreme Court Spokesperson Srikant Poudel told The Himalayan Times. The date for the next hearing would be available tomorrow. The Upper Karnali project, which is being developed by a consortium comprising GMR Energy, GMR Infrastructure and Italian-Thai Development Project, got entangled in the court case after 29 locals from western region filed a public interest litigation at the Supreme Court on July 14.
The PIL, filed against government bodies and the GMR, claims that the project does not serve national interest and speaks of non-transparency in survey license extension and capacity upgradation from 300MW to 900MW.
Based on the litigation, a single bench of Justice Bharat Bahadur Karki on July 23 issued an interim stay order and halted all activities related to the project. Although today’s hearing was expected to look into whether to continue the stay order, its postponement is expected to further delay the process of signing the project development agreement with the project developer, which is crucial to start construction phase.
Commenting on the issue, Radhesh Pant, CEO of Investment Board Nepal, a government body that oversees investments in large-scale projects, said, “The deal is in Nepal’s national interest. The delay is inflicting revenue loss of Rs 60 million a day on the government.” Pant was referring to a clause in the memorandum of understanding signed between the government and project developers that makes it mandatory for the consortium to give away 12 per cent of power generated through the project free of cost to Nepal Electricity Authority. The deal entitles NEA to 27 per cent shares in the project free of cost, while the project’s ownership has to be transferred to the government for free within 30 years from the date of commencement of power generation.
Leading representatives of the private sector are worried that hurdles like these may discourage foreign investors from putting money in several sectors, including energy. They say such interruptions will make it difficult for the government to achieve its goal of putting Nepal in the league of developing nations by 2022, for which annual growth rate of six per cent is required.
“Energy is one of the bottlenecks that is holding the country’s economy from taking off. To remove this, we need more foreign investment and we have always highlighted this issue during numerous talks held with different governments,” Suraj Vaidya, President of the Federation of Nepalese Chambers of Commerce and Industry, told THT.
Although it is said Nepal has the capacity to generate tens of thousands of megawatts of electricity, its production so far has failed to cross 800 megawatts. Since the supply so far has failed to meet the demand, power cuts have become a norm, while factories are forced to depend on expensive fossil fuel.
“This is the reason why we have been asking everyone not to hinder power production as it provides a lifeline to our industries and the economy as a whole,” Vaidya said. “However, this does not mean those involved in foul play should not be punished. But those who are doing their businesses in a transparent manner should not be penalised.”
GMR officials were not available for comments.
Source : The Himalayan Times