New law may discourage hydropower developers

KATHMANDU, March 3:

The Water and Energy Commission Secretariat (WECS) is preparing a new law, which, if endorsed, will require hydropower developers to go through one more agency, making the hydropower development process more complex.

At present, hydropower developers have to go through a number of state agencies, ranging form village development committees (VDCs) at the local level to the Ministry of Energy (MoE) to acquire survey license.

If the plan materializes, the developers of hydropower projects above 10 MW and irrigation projects of more than 500 hectares will have to go through one more agency – WECS.
Jhamak Prasad Sharma, spokesperson of WECS, said the commission was drafting Water and Energy Commission Bill in a bid to make WECS more powerful. “We will expedite discussion with stakeholders to draft a new law which will make WECS a regulator for energy and water resources,” he added.
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The plan, however, has drawn flak from hydropower developers. They say if the act is endorsed, it will only add additional burden on hydropower developers.
“There already are a number of regulatory bodies, including Ministry of Energy (MoE).

Excessive red tape will only discourage investors,” Gyanendra Lal Pradhan, chairman of Energy Committee at the Federation of Nepalese Chambers of Commerce and Industry (FNCCI) said. He added that developers need to spend nearly five years to seek approval from nearly a dozen state agencies before initiating development works which takes only around three years.

During the project study period, developers have to go through a lengthy process to seek permission from line agencies like the Ministry of Environment and Ministry of Forest and Soil Conservation.

“Our files remains stuck at ministries for months without any reason whatsoever,” added Pradhan.
A meeting of WECS, led by erstwhile energy minister Umakanta Jha, held in December had decided to prepare new law for the commission.

When asked whether the new law will add burden on investors, Sharma said they just want to bring projects into their notice for streamlining and harmonizing hydropower development as well as promote integrated use of water resources. He said preparations were on to table the bill in the parliament in this fiscal year itself.

The recently held Nepal Economic Summit had issued a 19-point declaration, which, among others, aims to identify regulatory burden on businesses. It aims to move Nepal 10 places up in the World Bank´s doing business ranking by 2016. At present, Nepal is ranked 105 out of 189 countries.

Source : Republica