Obstacles to Construction of Hydroelectric Projects

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Kathmandu – India has disrupted the import of explosives needed by Nepal for road and hydropower projects, and has also blocked the exchange between the projects being run in Nepal. In the letter sent by India to the government in the third week of May, it has been stipulated that the explosives imported from its country cannot be used except for the projects for which it is requested.

After India’s repeated disruptions in the import of explosives, the Council of Ministers amended the Explosives Rules-2020 on May 26, 2020, and provided that ‘the work can be carried out even with the aid of a weapon’. After the revised rules were published in the gazette, an attempt was made to start the project with enough explosives. Objecting to it, India stopped it by sending a letter.

An official of the Ministry of External Affairs confirmed that India has sent a letter with conditions regarding the import of explosives. According to him, during Prime Minister Pushpa Kamal Dahal’s visit to India, a letter was received from India regarding the use of explosives. In that letter, India has tried to disrupt the easy import by saying that ‘explosives should be used according to international law and practice’. “In the letter, it is mentioned that if India has to take explosives for any project or purpose, it should get an industrial user certificate (certificate with final user’s decision) at the beginning,” said the official.

India’s Obstacles to Construction of Hydroelectric Projects

After India suspended the permission to import explosives (no objection certificate) for 6 months, investors who went to China as an alternative are also facing problems due to the government’s policy. Due to the non-cooperation of the government, the explosives brought from China are now stuck in Rasuwagadhi Customs.

Investors bought explosives from China after the government brought in the Second Amendment Rule on Explosives last May, with the provision of allowing the seizure of explosives. But because the government did not implement the procedures, the explosives bought by traders from China were stopped at the customs. Importer Ananda Chaudhary said that 90 tons of the 140 tons of explosives bought from China were stopped at the customs. ‘We ordered 140 tons of explosives from China for the army’s expressway so that it could be used to detonate,’ he said, ‘only 50 tons could reach the army’s bunker. Other explosives have been in customs for three weeks.’

Chaudhary, who is also the vice-president of IPPAN, went to China as an alternative after several attempts to bring him from India. Chaudhary says that only after revealing who and where to take the explosives in the customs, the customs will be cleared and for that the Ministry of Home Affairs should implement the procedure. Earlier, Chaudhary had used 90 tons of explosives brought from China by Hongsi Cement, Sanjen and others.

According to a secretary, apart from those involving Indian investment and construction companies, there is a shortage of explosives in many projects, due to which the cost of the project increases and the development construction is not completed on time. Nepal used to import explosives under the prior approval and supervision of the Ministry of Defense and Home Affairs.

The use of explosives was also being coordinated with the army. India has also repeatedly blocked the raw materials needed for the emulsion plant run by the Nepalese army.

For hydropower operated through Indian investment and construction companies, there is no restriction on the import of explosives. India has invested in seven hydropower projects of 4,639 megawatts in Nepal. The 900 MW Arun 3rd hydropower project is under construction with the investment of the Indian company Sutlej Jalvidyut Nigam. Indian companies have also received contracts for 490 MW Arun IV, 669 MW Lower Arun, 750 MW West Seti, 480 MW Phukot Karnali, 900 MW Upper Karnali and 450 MW Seti Nadi-6 Indian companies have also got contracts.There is no Indian obstruction in these projects. India has obstructed projects involving investors from Nepal and other countries by making conditions and confusion.

The works of Tanahun Hydropower, Khimti 2nd, Napuche Likhu, Middle Tamor, Kabeli, Lamtang, Lower Ikhuwa Khola, Sanjen and other projects under construction with Nepali investment have been affected for months. According to energy promoter Krishna Acharya, the main reason for this is Indian restrictions on explosives. Due to the lack of explosives, all the tunneling work in the 48.8 MW Khimti second hydropower project has been stopped.

After Working procedure for lending and borrowing makes comfortable to the project, Solukhola Jalvidyut, Tanahun Jalvidyut, Kathmandu Terai Expressway, Madhyatamor, Kabeli A, Sanjen and other projects submitted a request to the House to be allowed to use procedure lending and borrowing. Bharat Parajuli of the Independent Energy Producers Association (IPPAN) says that the Home Office did not forward the file after India’s letter. ‘After the shortage, a procedure was made to use it from lending and borrowing, but after India sent a letter to the foreign
countries warning the home, none of the projects could proceed,’ he said.

Parajuli says that the provision of prohibiting the use of explosives in projects other than the country for which it is indicated is aimed at China. “China is called a third country without saying it directly,” he said. After the revision of the procedures related to explosives, Chinese investments and projects worked by contractors will also be subject to sanctions.

In speculation, another energy promoter said that India has corresponded In 2018, in the security mechanism meeting held in Jaipur, India, India had set a condition of understanding that the explosive materials given for one project could not be used by others.

TN Acharya, the promoter of Napuche Likhu hydropower project, says that the lending and borrowing procedure has added more problems to the project. “The government has brought what and what not, but none of the projects have been approved. On the contrary, India started to build many camps,” he said. Chinese contractors and workers have spread around the world due to cheap and easy technology and skills. While the same Chinese are working in Nepal, India is having a headache.’

According to Deputy Prime Minister and Home Minister Narayankaji Shrestha, India is interested in where and what explosives were used. ‘We are in the process of diplomatic discussions with India on this matter. We are hopeful that it can be resolved soon,’ he said.

A former Chief of Army Staff says that various plants of the army could not be operated at full capacity due to lack of import of raw materials as required. According to him, the process of increasing the capacity of Swayambhu’s ammunition depot was transferred to Tanahun. In July 2016, the government had also approved a budget of 14.75 billion rupees for the transfer and installation of new ammunition production plant, detonator plant, etc., but it did not proceed after that. Some money was spent to increase the capacity of self-propelled ammunition.

The emulsion plant of Makwanpur was also started to operate with double base equipment. Sundarijal Arsenal, apart from German technology, the process of expansion was started by bringing equipment from South Korea,” a former army commander told Kantipur, ‘but the existing plants could not run according to their capacity. Swayambhu ammunition depot also could not be transferred. The main reason for that is that raw materials do not come easily from the neighborhood through the land route.

A retired journalist said that India proposed to install the equipment in Makwanpur’s Sunachari, and asked for inspection permission for it, but because it was very sensitive and related to national security, it was not agreed, so the import of raw materials was affected. According to the ex-general, after purchasing equipment from China and the operation of the double base plant in Sunachari, the import of raw materials required for it has become difficult. “If the Sunachari Emulsion Plant of Makwanpur was run at full capacity, a large portion of the explosives needed by the development, construction and security agencies could be handled,” he said.

It is estimated that more than 3,000 metric tons can be produced from the army’s emulsion plant out of a total of 5,000 metric tons of explosives required in Nepal. But due to insufficient raw materials, the plant has not been able to run at full capacity. If double base propellant plant, automatic carting and filling machine and other equipment are operated at full capacity, production can increase up to 6 times.

More tax when imported from China

When buying explosives from China, one has to pay 10.5 percent more tax than India. Due to the South Asian Free Trade Association (SAFTA) agreement, the government gives a discount on the import of explosives from India. Imports from India are taxed at only 22.5% with 9.5% customs duty and 13% VAT. When importing from China, 20 percent customs duty and 13 percent VAT, totaling 33 percent tax has to be paid.

When brought from China, you have to pay additional security fee up to the Nepali border. “Due to the problem of building infrastructure due to the lack of explosives, even though it was expensive, the government could not pass the customs because of the government’s fault,” said IPPAN Vice President Anand Chaudhary. IPPAN President Ganesh Karki says that even though the private sector has been asking for an easy environment to bring explosives from China, the government has not listened.

Source: Kantipur