PDA talks with GMR on two mega projects ongoing

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    KATHMANDU, June 15:

    GMR Group LogoThe government is holding project development agreement (PDA) negotiations with GMR, an Indian infrastructure developer, for two large scale hydropower projects, namely 900 MW Upper Karnali and 600 MW Upper Marsyangdi.

    Nepal Investment Board (NIB), a high level government entity that facilitates the implementation of large scale infrastructure projects (of 500 MW and above), is engaged in the PDA negotiations with the developer since last week.

    “A taskforce comprising members from NIB, British legal consultant firm Herbert Smith, and the developer has been formed to sort out some of the issues that have been raised during the first round of negotiations,” a high level source told Republica.

    According to the source, the taskforce has been given two weeks to identify a common point that both the government and the developer can agree on. “The taskforce that has been having its meeting in a row has already spent almost a week,” the source revealed.

    NIB, which was formed almost one and half years ago in a bid to carry out the implementation of large scale projects in fast track mode, has formed a PDA negotiation team with Radhesh Pant, NIB chief executive officer as coordinator. Other members of the team include representatives from the Ministry of Energy (MoE) and Ministry of Finance among others.

    “PDA talks are going on,” Keshav Dhwaj Adhikari, joint secretary at the MOE, who is also a member of the team, said declining to divulge the details. “We are not allowed to talk to the media.”

    The government had allowed GMR Upper Karnali Hydropower Company and Himtal Hydropower Company – subsidiaries of GMR – to increase their capital and set up offices in New Delhi in December 2012.

    GMR, which has applied for power generation license of Upper Karnali, has not signed the project negotiation agreement (PNA) so far. NIB has been asking GMR to sign the PNA for the last one month. Normally, PDA is signed within 18 months of signing a PNA.

    The survey license that the government granted to GMR for Upper Karnali in May 2008 expired in last May. The developer should apply for a power generation license if it wants to secure the project in hand.

    Similarly, the two subsidiaries of GMR have increased their authorized and issued capital from Rs 450 million to Rs 1.9 billion for each of the companies.

    Additionally, NIB is also working to start PDA talks with Sutlej Jal Vidyut Nigam, another Indian state-owned power developer, for 900 MW Arun III. According to a source close to the developer, Sutlej is arguing that it does not want to sign PDA as it is an Indian government-owned company.

    Source : Republica