Nepal sends new PTA draft for India’s consent

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    KATHMANDU, AUG 01 –

    PTA-1 A new Power Trade Agreement  drafted by a three-member cross-party panel has been forwarded to India for approval.

    The draft that incorporates inputs from the Ministry of Energy is focused on power trade between the two countries. It says that the power tariff would be determined by the market while third parties would not be barred from a power deal in Nepal and India.

    After the panel comprising Finance Minister Ram Sharan Mahat from the Nepali Congress, Bhim Rawal from the CPN-UML and Narayan Kaji Shrestha from the UCPN (Maoist) agreed on the draft, it was forwarded to the heads of their parties for consent. The draft was forwarded to the Indian side through the Ministry of Foreign Affairs.

    If India agrees to Nepal’s proposal, it should be approved by the Cabinet in Kathmandu.

    Though the panel had agreed not to mention anything on power development in the draft, Shrestha charged the Energy Ministry with inducting it in the PTA draft. The panel had suggested inducting a line, “to promote the power sector, the two sides will promote joint ventures on agreed terms in accordance with the local law,” in case PTA negotiations would not make a headway during Indian Prime Minister Narendra Modi’s visit. But Energy Ministry officials had inserted the clause in the PTA draft without consulting them.

    While the major parties are one on signing the PTA during Modi’s visit, they seem to be divided over the project development agreement ( PDA ) plan for Upper Karnali Project. The Upper Karnali PDA negotiation is in final stage.

    The parties and the government are running out of time to finalise the PDA which needs clearance from the Investment Board Nepal, the political leadership and the Cabinet. Some leaders in the all-party meeting called by PM Sushil Koirala on Thursday sought parliamentary approval for both PTA and PDA . “We have no time for House approval. After political consensus, if time permits, it will be approved by the Cabinet and presented to the House later,” said a minister.

    According to Foreign Ministry officials, agendas were yet to get final shape on Thursday. The ministry is undecided whether political consensus is necessary for a deal. “The Foreign Ministry has asked the political leadership not to sign any deal in haste and face controversy in future,” said an official.

    On Thursday, submitting a four-point demand, an alliance of 33 parties asked the government not to sign any energy-related agreement with India urgently. The alliance is against reaching any deal with India such as PTA orPDA or security matters.

    Source : eKantipur

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    Nepal to delink power generation from trade in its PTA proposal 

    KATHMANDU: Nepal is preparing to enter into Power Trade Agreement (PTA) with India by laying emphasis on electricity trading between the two countries and connection of transmission lines, without touching upon the issue of garnering Indian support for electricity generation here. 

    “The draft of the PTA we have prepared focuses on trading in power between the two countries and cross-border grid connection to facilitate import as well as export of electricity,” Finance Minister Ram Sharan Mahat told The Himalayan Times. “It does not include provisions of Indian investment in hydroelectricity generation and harnessing the country’s hydropower potential with Indian support.”

    The latest move unbundling power generation from power trading is expected to calm those who had bitterly opposed a provision in the draft agreement on Nepal-India cooperation in power sector, which, they said, hinted at giving sole authority to Indian government or companies to build hydroelectric projects in Nepal. 

    Article III (b) of the draft Agreement between India and Nepal on Cooperation in Power Sector, prepared by India, said: “…the parties shall cooperate in effective harnessing of Nepal’s hydropower potential through facilitation and speedy construction of hydroelectric power projects in Nepal either with 100 per cent Indian investment or joint venture with Indian entities.”

    Although the provision was subject to modification and politicians knew about it, many vented ire, creating uncertainty over signing of PTA with India, which Nepal had desperately wanted. 

    As the dust over the issue couldn’t be settled till the time Indian External Affairs Minister Sushma Swaraj visited Nepal from July 25 to 27, the three major parties — Nepali Congress, CPN-UML and the Unified CPN-Maoist — formed a three-member panel to finalise the PTA modality.

    Although Mahat says the PTA draft is almost final, it is not sure when the pact will be signed. “I cannot say anything on that (sealing the deal) as the Indian side will also have to agree with our proposal.” 

    His statement means the pact may or may not be signed during Narendra Modi’s two-day official visit to Nepal beginning Sunday.

    Nepal had first signed PTA with India on February 17, 1996. However, it could not be implemented due to inability to develop adequate hydro projects and transmission lines during the decade-long Maoist insurgency.

    With the restoration of peace, Nepal has once again been pushing India to reach a power trade pact, as the deal would officially give access to domestic and international hydro project developers to sell electricity produced here in the vast market in the south.

    It has become vital for Nepal to give assurance of market access to investors, as the country is expected to produce at least 1,998 MW electricity during wet seasons by December 2019, which will be enough to meet the country’s power demand of that time. This means those who generate power will have to find markets abroad to sell their product.

    On the flip side, the PTA, along with development of cross-border transmission lines, will allow Nepal to import as much power to meet domestic needs in the short term and give impetus to the manufacturing sector’s growth.

    Source : The Himalayan Times