The Supreme Court on Wednesday issued a one-week stay order, barring the work on the 216-MW Upper Trishuli Hydroproject 1.
A single bench of Justice Tahir Ali Ansari issued the order, asking that the defendants be produced before the court within seven days.
As per the court order, the government or the developer of the project cannot proceed ahead with the project development. The court’s order came in response to a writ petition filed against the government’s decision to restore the survey licence of Nepal Water and Energy Development Company (NWEDC).
Lawyers Mithilesh Yadav and Amarjibi Ghimire and Shambhu Prasad Dahal had filed the petition on Tuesday. The petitioners have named the Prime Minister and his office, the co-coordinator of the Cabinet’s Economic Infrastructure Committee (EIC), the Energy Ministry, the energy secretary, the director general of the Department of Electricity Development, and NWEDC as defendants.
An EIC meeting on Sunday had decided to restore NWEDC’s licence for the next 18 months, stating that NWEDC has ‘made progress’ in the project development.
A month ago, the Energy Ministry had scrapped NWEDC’s license for not completing the assigned tasks on time, particularly for its failure to sign connection and power purchase agreements with the Nepal Electricity Authority and conclude an Environmental Impact Assessment.
As per clause 5(1) of the Electricity Act 1992, once a licence is cancelled, it cannot be re-issued to the same company and that the government’s move to restore NWEDC’s license is illegitimate, the petitioner has said. “The Energy Ministry presented a proposal to the Cabinet under the Prime Minister’s direction. The proposal was later sent to the Cabinet’s Economic Infrastruc-ture Committee,” stated the writ. “This is against the immediate action plans on good governance and economic development, the direction of the Commission for Investigation of Abuse of Authority and clauses 4 and 5 of the Electricity Act.”
The petition stated that the government’s decision would encourage licence holders to hold licence for a long time without making any progress in project development, and that the government may have to restore the scrapped licences of two dozen companies.
After the government cancelled NWEDC’s licence, it began lobbying for the restoration. Donor agencies like the International Finance Corporation met top government officials and political leaders requesting the restoration of the licence. The company, which has South Korean investment, acquired the licence on January 8, 2007.
The estimated cost of the Upper Trishuli project, scheduled to be completed by 2018, is Rs 45.50 billion. Korea South East Electric Company will have a 50 percent stake, Daelim Industrial Company 15 percent and Kyeryong Construction 10 percent in the project. Nepali investors will own 10 percent and IFC 15 percent shares. The project will be constructed under the Build-Own-Operate-Transfer model.