Rs 37 billion collected so far to build Budhi Gandaki Hydroelectric Project

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November 5, 2019

The government has mobilized Rs 37.17 billion in infrastructure development tax from import of petroleum products till the end of October.

As per the budget speech of Fiscal Year 2016/17, the government has been levying infrastructure tax of Rs 5 per liter at the customs point on the import of petrol, diesel, kerosene and aviation turbine fuel (ATF) for the construction of Budhi Gandaki Hydroelectric Project. According to Nepal Oil Corporation (NOC), the revenue collection on the heading amounted Rs 3.26 billion in the first three months of the current fiscal year alone.

“Rising import of petroleum product means the government has been collecting an average of Rs 1 billion every month,” said by Nagendra Sah, deputy managing director at the NOC. “Based on the rate of revenue collection, the country will have adequate amount to invest in the project from domestic sources,” he said.

Earlier, NOC used to collect the tax directly under the heading of Budhi Gandaki Hydropower Project. But the government has been collecting the same under the heading of infrastructure tax for the past two years. The amount collected in the heading goes to the state treasury.

Dinesh Kumar Ghimire, secretary at the Ministry of Energy, Water Resources and Irrigation, said the finance ministry has been using the fund to distribute compensation for land acquired for the mega project.

The government has initiated construction of the 1,200 MW storage project in the Budhi Gandaki River that flows between Gorkha and Dhading districts. As of now, the government has finalized the project’s detailed project report (DPR) and has been providing compensation to the people affected by the project construction.

Ghimire told that the government so far has distributed Rs 26 billion in compensation for land acquisition. “An additional Rs 40 billion has been earmarked for the purpose by this fiscal year,” added Ghimire.

He added that the government has targeted to complete the process of distributing compensation to people residing in the rural areas by mid-July, while it aims at distributing compensation to project-affected locals residing of town area in the next fiscal year.

The ministry is yet to select contractor to develop the project.

Earlier, the government had roped in Chinese contractor Gezhouba Group Corporation for execution of the national pride project. The government was supposed to handover the project development to the Chinese contractor under engineering, procurement, construction and financing (EPCF) model without competitive bidding. However, the Chinese contractor has now become apathetic to take the work forward.

The finance ministry later advised the energy ministry to go for a competitive bidding by reducing the project cost.

As per Ghimire, the ministry will invite bids to develop the project after completing distributing compensation to the project-affected locals.

 

Source: My Republica