Power deals ‘not to be signed’

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    KATHMANDU, AUG 03 –

    Energy_trade_treatyThe much talked about power trade agreement (PTA) between Nepal and India and power development agreement (PDA) with India’s GMR are unlikely to be signed during Indian Prime Minister Narendra Modi’s visit.

    With ruling parties divided, the Cabinet on Saturday informally agreed to complete the signing of both the PTA and the PDA within the next one and a half months.

    Highly placed sources said the Cabinet agreed on Saturday that the joint-press communiqué would mention “PTA and PDA will be done within one and a half months” if the Indian side agrees.

    The prime ministers of the two countries will direct concerned officials to complete the negotiations within six weeks as agreed at the foreign ministers’ level last week, said Minister for Law and Justice Narahari Acharya.

    Earlier on Saturday, a meeting of the Investment Board Nepal (IBN) board failed to endorse the PDA deal reached between the IBN and the GMR ITD Consortium for the Upper Karnali Hydropower Project.

    The IBN and India’s GMR ITD Consortium had ended protracted negotiations to reach a PDA for the 900 MW project on Friday, aiming to sign a final agreement during Modi’s visit.

    “Some ministers raised questions over the impact of Upper Karnali on the irrigation projects downstream,” said a minister who attended the meeting. “The PDA with GMR was postponed as some study is necessary before the deal.”  Sources say a section in the Nepali Congress was also not keen to have the PDA deal during Modi’s visit.

    Coalition partner CPN-UML too was non-committal over the PDA. On Saturday, UML Chairman KP Sharma Oli said at the UML Parliamentary Party meeting that the government should not sign the PDA for Upper Karnali in haste.

    “Power development agreement is necessary but we have yet to go through the PDA text,” UML lawmaker Prakash Jwala quoted Oli as saying.

    The IBN team made a detailed presentation on the PDA reached with India’s GMR ITD Consortium at the board meeting chaired by Prime Minister Sushil Koirala. However, some ministers sought additional time to discuss the PDA deal.

    Industry Minister Karna Bahadur Thapa, an IBN board member, said further study and consultation are necessary before signing an agreement with GMR. “It’s a regular process and we can finalise it even after the Indian PM’s visit,” said Thapa.

    The Cabinet also decided to form a committee headed by National Planning Commission Vice-chairman Govinda Raj Pokharel to study the PDA document to see whether any clauses require amendment.

    The committee has got to submit its report with suggestions at the earliest. The first meeting of the committee held on Saturday decided to submit its report within three weeks.

    “We will also gauge the opinion of ministries regarding the PDA document,” said Pokharel. Other members of the committee are the chief secretary, central bank governor and secretaries of energy, irrigation, environment, land reforms, forest and finance ministries.

    Source : The Kathmandu Post

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    No PTA, PDA during Modi’s visit

    KATHMANDU, Aug 2

    The much-awaited power trade agreement (PTA) with India and project development agreement (PDA) for hydropower projects will not be signed during the two-day Nepal visit of Indian Prime Minister (PM) Narendra Modi.

    Stating that adequate preparation has not been done for PTA and PDA, the cabinet meeting on Saturday decided to sign the agreements by forging consensus within six weeks. The energy sector once again is facing uncertainty as the breakthrough agreements through which the government plans to attract investment in the sector will not happen. The government had planned to send positive message to the investors by forging consensus on both the agreements by getting the PDA approved by the Investment Board (IB) and cabinet on Sunday. Chance of signing of PTA has ended for now as the Indian side refused the draft Nepal sent for PTA.

    The Energy Ministry had prepared for signing of PTA with India and IB for PDA with promoter of Upper Karnali GMR Energy Limited on the occasion of Modi’s visit. IB and GMR have already agreed on PDA and it was set to be approved through IB’s meeting on Saturday. But IB formed a committee to submit recommendations after studying the agreement after a few IB members opined that the legal aspects of PDA with GMR must be studied. Cabinet sources revealed that India has refused Nepal’s proposal in PTA draft for allowing investors from Nepal, India and other countries to trade power without any obstruction in both India and Nepal, and permission to sell electricity generated in Nepal to the third countries through India. The cabinet has added six weeks after the India side asked for more time, according to the sources. The cabinet meeting on Saturday had decided to sign PTA following political consensus on both PDA and PTA.

    The Joint Commission Meeting between the two countries held last week during visit of Indian Minister for External Affairs Sushma Swaraj had agreed to conclude the issue of PTA through minister level dialogue after formulating a committee stating that requisite preparations were not completed. Nepal had hoped to sign PTA during Modi’s visit. Energy Minister Radha Kumari Gyawali conceded that PTA will not be signed in lack of preparations. “We sent the draft of PTA to India late. I have been told that it will be delayed as the Indian side has asked time for additional study,” she added. She revealed that agreement on PTA will now be made through minister level meeting as decided by the Joint Commission Meeting.

    She claimed that both PTA with India and PDA with GMR for Upper Karnali will be signed within six weeks. Nepal had taken initiative for PTA after big developers said it was necessary. The cabinet meeting, similarly, has also decided to end the disagreement over Pancheshwore Project.

    Source : Karobar Daily