Pvt sector okayed to conduct large power line projects too



    wpid-powerlines.jpegThe government has allowed the private sector to build transmission lines worth more than Rs 500 million too as part of its effort to facilitate greater participation. A board meeting of the Nepal Electricity Authority (NEA) held on Tuesday decided to remove restrictions on private firms undertaking large projects.

    Earlier on March 12, the NEA board had opened the door for private firms to implement transmission line projects, but they were permitted to invest in domestic projects valued at up to Rs 500 million only on a trial basis. Before the change in policy, the NEA was the sole entity permitted to build transmission lines in the country.

    With the latest NEA decision, private investors can undertake large power line construction projects. NEA board member Tek Nath Acharya said that the board meeting on Tuesday decided to let the private sector invest as much as they wanted to. “The investor can directly invest up to Rs 500 million,” he said, “However, with regard to investments higher than that, the investor is required to obtain permission from the NEA board.”

    “However, as building transmission lines is a costly project, we felt that the amount fixed earlier was very nominal, and that investors would find it difficult to implement any project by staying within the investment limit,” added Acharya.

    The NEA has allowed the private sector to develop transmission lines under the build, own, operate and transfer (BOOT) model. Such projects need to be handed over to the NEA after 15 years.

    The government will begin handing over transmission line projects once the modality is endorsed. The NEA is currently preparing a modality under which it will permit investors to finance transmission line projects.

    A team led by NEA director general Rajeshwor Man Sulpiya has been studying various international models for background to prepare the most suitable and investor-friendly system. The proposed modality is expected to institutionalise private sector investment in the construction of power lines.

    Though the recent meeting said nothing about whether the private sector would be allowed to invest in cross-border transmission lines, the modality will lay down the rules in this regard, according to NEA officials.

    The private sector had long been demanding that they be allowed to develop transmission line projects. A number of companies including Himalaya Energy Development Company (HEDC) have even submitted proposals to obtain the Energy Ministry’s go-ahead in this regard. HEDC has proposed building the 132 KV Khimti-Gajryang transmission line under the build and transfer (BT) modality.

    Source : The Kathmandu Post