Project not yet ready to absorb Rs 100b Indian credit
KATHMANDU, August 1:
It's one year next week since Indian Prime Minister Narendra Modi's visit to Nepal and the state of progress made since on bilateral development issues is a mixed bag. Energy-related agreements between the two countries are achievements but project preparation to utilize the Rs 100 billion Indian line of credit has lagged, except for the selection of some road projects.
The Modi visit pushed forward the energy issues in Nepal. The Power Trade Agreement (PTA) for cross-border electricity trade was an achievement, said Keshav Dhwaj Adhikari, joint-secretary at the Water and Energy Commission secretariat. Modi, in his address to parliament here on August 3, 2014, said India would help solve the energy crisis in Nepal short term while Nepal's hydropower would eradicate darkness in India long term. Likewise, two Project Development Agreements (PDAs) for Upper Karnali and Arun III were achievements and Indian developers are involved in both.
"Bilateral issues concerning energy and water used to stall over minor glitches but Modi's visit provided a push forward," said Adhikari, a key official during the PTA negotiations.
The 5,600-MW Pancheshwar Multipurpose Hydropower Project, which had stalemated for 18 years, gathered momentum, with two meetings of the Pancheshwar Development Authority governing body held in Kathmandu and New Delhi. Preparation of a Detailed Project Report (DPR) is underway on a war footing. "Though we are behind the one-year deadline announced by Modi for the DPR, things are headed in the right direction," said Dilip Kumar Sadaula, chief of Pancheshwor Multipurpose Project, the Nepali agency for the development of the project.
Water and Power Consultancy Services (WAPCOS) is working on the DPR in the field and it may take another 12 month, according to Adhikari. A Nepali CEO for the authority, an Indian additional CEO and executive directors have already been appointed.
Energy expert Surya Nath Upadhyaya lauded the PTA and PDAs. "But progress that is not in line with the plans is no achievement," said Upadhyaya, addiing that projects like Rahughat Hydropower have been near failures.
The contract with Indian contractor IVRCL Infrastructure was recently terminated for failure to make any progress. There was delay in consultant selection. India sought to select an Indian consultant.
Experts also credit the Nepal-India PTA with setting the ground for energy trade deals among SAARC countries during the 18th summit.
Upadhyaya also criticized Modi's government for not addressing the problem of innundation by embankments built by India in boarder areas and for the agreement with China on using Lipu Lekh in Nepali territory as a trade route.
Former ambassador to India Bhekh Bahadur Thapa said, "Initially, Modi's policy was one of development-oriented diplomatic relations with neighboring countries ." But it now seems work in that direction has not even started, he complained.
RS 100 BILLION LINE OF CREDIT
In his address to parliament, Modi announced a Line of Credit (LoC) of Rs 100 billion for investing in priority areas,. such as infrastructure and hydropower. But Nepal is yet to ready the projects, except for some roads with Rs 33 billion in funding and two irrigation projects with Rs 20 billion. The road projects include Ranke-Rabi-Bhedetar, Charikot-Jiri, Seleghat-Ramechhap-Sanguatar, Gaindakot-Rampur-Pipaldanda, Lamahi-Ghorahi-Tulsipur, Bhalubang-Bagdula-Bhimgitte and Sahajpur-Boktan-Dipayal. Funds for the roads have already been earmarked, and there are also seven minor urban roads in the Tarai.
Mahakali Irrigation Project III and rehabilitation of the Koshi Pump canal and distribution system are among the irrigation projects selected. But the government is clueless how to use the remaining fund of Rs 50 billion earmarked for the energy sector.
Energy Secretary Rajendra Kishore Kshetri said they don't have any hydropower project right now to inject funds into.
There was a long debate over injecting funds into the 1200-MW Budhi Gandaki Hydropower Project. MOE officials say Rs 50 billion is too little as the estimated cost is Rs 250 billion.
Source: Republica
