'Don't delay construction of West Seti project'

KATHMANDU:

Parliamentary Committee on Agriculture and Water Resources today instructed Investment Board Nepal (IBN) to identify problems hindering development of West Seti Hydropower Project within a month so that the construction of the 750-megawatt project could be expedited.

In this regard, the IBN, which oversees hydro projects of over 500MW and investments of over Rs 10 billion, should hold dialogues and coordinate with the Ministry of Energy (MoE) and other relevant government authorities, says a directive issued today by the parliamentary committee.

Earlier in November, the parliamentary committee had asked the IBN and the MoE to work together to frame a common concept on the proposed project.

Although the two agencies had held two rounds of meetings, nothing concrete had come out. This was largely because IBN and MoE have been holding divergent views on development of the project for long.

MoE has been saying that the memorandum of understanding (MoU) signed with CWE Investment Corporation (CWEI), the Chinese developer of West Seti project, in February 2012 is faulty.

This, according to Energy Secretary Rajendra Kishore Kshatri, is because the MoU mentions energy produced by the project is meant for domestic consumption. “But by the time the project is ready, Nepal may not need its electricity, since the country is expected to meet power demand of wet season by 2017.”

Nepal Electricity Authority, the sole energy buyer here, also holds the same view. Because of this, it has not shown keen interest in signing power purchase agreement with CWEI, a subsidiary of China Three Gorges Corporation.

IBN also considers these concerns valid. But it holds the view that these issues can be addressed while holding negotiations for signing of project development agreement with the Chinese company.

This means there are chances of West Seti project turning into an export-oriented hydro project, like Upper Karnali and Arun-III.

If that happens, government should not make 25 per cent equity investment in the project as mentioned in the MoU, some of the lawmakers have argued.

It is said the government will have to invest around Rs 40 billion just to build transmission lines to evacuate power generated by the project. “But if the project is export-oriented, why should such a big investment be made by the government?” lawmakers asked.

Despite this, many lawmakers are in favour of building the project. In its verdict, the parliamentary committee today said: “There should be no delay in construction of the project.”

West Seti project, located in far-western region of the country, will spread in four districts — Doti, Dadeldhura, Baitadi and Bajhang. The project has the capacity to generate electricity for 24 straight hours throughout the year, except in dry season when power generating capacity is expected to dip to eight to nine hours a day.

Last week, Lu Chun, chairman of China’s Three Gorges Corporation, parent company of CWEI, had met PM Sushil Koirala to discuss development of the project.

Source: THT