West Seti in limbo as two mega projects move

    • Investment Board, ministry have differing readings of Chinese developer’s commitment to hydropower project

    west_setiKATHMANDU, DEC 01 – Even as the project development agreements (PDA) for two mega hydropower projects—Upper Karnali and Arun III–have got through, the fate of another large project—West Seti—hangs in a balance.

    The Agriculture and Water Resource Committee (AWRC) of Parliament on Sunday directed the Investment Board Nepal (IBN) and the Ministry of Energy to come up with a common stance on the development of the West Seti project. This is the second directive in two months from the AWRC to the IBN and the ministry amid their conflicting views and the sluggish work on the 750MW project. The IBN says the project is on course while ministry officials doubt the Chinese developer’s commitment to it.

    No headway has been made in the development of the project since a MoU was signed between the IBN and the CWE Investment Company, a subsidiary of the China Three Gorges Corporation, two and a half years ago.

    AWRC Chairman Gagan Thapa said IBN’s failure to clarify to the committee about the project status and Energy Secretary Rajendra Kishore Kshatri’s statement had created confusions about project proceedings.

    At an AWRC meeting last month, Secretary Kshatri said the Chinese firm would not develop the project and even if it did, the cost would be excessive due to a long transmission line required to be built to evacuate the energy.

    According to Thapa, the line ministry should have the final say about a project in the energy sector.

    In Sunday’s meeting, IBN CEO Radhesh Pant said a research team from the CWE had visited Nepal three weeks ago to study the power consumption scenario in Nepal. Pant said it was a gesture from the CWE that the company was committed to developing the project. The team is expected to submit its report to the IBN in two months. The IBN source, however, agrees that the Chinese developer is taking too long to decide.

    Regarding their failure to hold discussions on the project, ministry sources said they were preoccupied with the power trade agreement with India and follow-up meetings including one on the Pancheshwar Development Authority in New Delhi. IBN too said they had been busy with the Arun III PDA.

    IBN officials said the main concern of the CWE was the domestic market for the power produced. Nepal Electricity Authority has yet to assure the developer of a power purchase agreement. Unlike the export-oriented Upper Karnali and Arun III, West Seti is meant for domestic use.

    According to NEA Managing Director Mukesh Kafle, the power utility is undecided whether to sign a PPA for West Seti as the project is storage type whose cost is higher compared to run-of-the-river schemes.

    Transmission line is another concern as the government builds it. While transmission line master plan is in the making and the Nepal-India transmission line interconnectivity in the feasibility study phase, Kafle said reports from these studies would guide the West Seti transmission line policy. “West Seti transmission line will be a component of the study,” said Kafle.

    Source : The Kathmandu Post