Modality for Budhigandaki Hydropower Project development still undecided

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    KATHMANDU, Nov 2: It has already been four years that the government initiated work on Budhigandaki Hydropower Project, announcing the reservoir project as a national pride project. However, the government has not been able to finalize its development modality yet.

    The project is being developed by setting up Budhigandaki Hydroelectric Development Committee (BHDC). However, many, including energy secretary Rajendra Kishore Kshatri as well as many lawmakers, argue that the government ownership modality does not work for project of this scale.

    They have suggested forming a project development company under the Companies Act 2006 so that the company can raise equity and mobilize resources for the development of the project which is estimated to cost Rs 250 billion including around Rs 58 billion for land acquisition and resettlement of affected people.

    Upon completion, the project being developed on the Budhigandaki River that borders Gorkha and Dhading districts is expected to end the country’s power owes.

    Speaking at a discussion program at the Agriculture and Water Resources Committee (AWRC) of legislature-parliament on Sunday, Secretary Kshatri said that the development committee modality will not suit for the project of this scale. He was for forming a company under Companies Act, while BHDC Chairman Laxmi Prasad Devkota has suggested forming an authority to develop the project.

    Former energy minister Radha Gyawali had lobbied hard for the development committee modality to develop the project.

    Speaking at the discussion, lawmaker Chinkaji Shrestha blamed lack of coordination between the BHDC and the ministry for delay in the project. “We had to move for pillar to post to secure even minor budget allocation,” he added. Shrestha, who is among the project-affected people, said the government hasn’t put the project in priority even though locals have extended all possible support for development of the project.

    Joint Secretary of Ministry of Finance Kebal Prasad Bhandari, who is also the member of BHDC, also conceded that the state mechanism cannot develop the project. “It should be developed in the company model so that technical hands can be hired from the open market,” he added.

    Lawmaker Shrestha said they had asked the government to allocated Rs 29 billion, half of the estimated cost for land acquisition and resettlement, in this fiscal year. “But only Rs 3 billion was allocated,” he added.

    According to a study report, the project will displace 44,643 people of 8,117 households.

    Shrestha also said the development committee model will not help as financing companies do not show interest in such projects. “Also people might not be interested to invest in initial public offering (IPO) floated by a government body,” he added.

    Lawmaker Bikram Khanal blamed political leadership for dragging its feet on the project despite having all-party consensus for development of the mega project.

    Lawmakers from the project-affected area said many affected households, whose houses have been damaged by the earthquake, are desperately waiting for the government to endorse resettlement plans and compensation package.

    The committee has directed the government to come up with a workable modality for the development of the project soon and expedite work for the development of the project considering acute energy shortage in the country.

    Gagan Thapa, chairman of AWRC, also said that the project should be developed by mobilizing internal resources.

    Source : Republica