West Seti Project likely to lose licence
KATHMANDU, JUN 06 -
By the looks of things, West Seti Hydropower Company Limited (WSHPL) is all set to lose its license for the 750 MW West Seti project.
Energy Minister Gokarna Bista on Sunday said the government is planning to scrap the license awarded to the company. “We have asked the company to furnish clarification on why should it not be closed,” said Bista. “If it fails to come up with a reasonable reply within the next 15 days, the government will move ahead with the licence scrapping process.”
As the project’s construction work has not moved ahead for a long time, the government has almost made up its mind not to extend WSHPL’s survey license.
Failing to get the much needed resources, WSHPL had proposed building the project under Public Private Partnership (PPP) model in January this year. The company had filed an application at the Department of Electricity Development (DoED) seeking extension of the deadline for financial closure of the project and also sought the government’s involvement in the project.
However, indicating that it would not extend the deadline, the Ministry of Energy (MoE) had sought clarification from WSHPL for its failure to proceed with the construction of the project based in located in Doti and Dadeldhura districts.
The company had received the licence in 1997 under the build-own-operate-transfer (BOOT) model. However, it has not been able to move ahead with the construction of the project whose estimated cost is Rs 120 billion.
The project was originally designed as an export-oriented one, with 90 percent of the power to be exported to India. WSHPL had signed an agreement with the government 16 years ago to this effect. Australia’s Snowy Mountains Energy Corporation (SMEC) was the major promoter of the project.
The cash-strapped project got a boost when the China National Machinery and Equipment Import and Export Corporation (CMEC) decided to invest in it. CMEC even signed an agreement with WSHPL during then Prime Minister Madhav Kumar Nepal’s China visit in 2009. CMEC President Jia Zhiqiang and WSHPL Director Pandey had signed a memorandum of understanding in Beijing. The Chinese firm had decided to invest Rs 15 billion in the project.
However, CMEC later opted to pull out of the project saying that Nepal lacks an investment-friendly environment. Another important shareholder of the company, Asian Development Bank, also did not show interest citing lack of public acceptance of the project and lack of good governance.
The project received yet another a jolt when the main promoter of the company, Australia’s Snowy Mountain Engineering Corporation (SMEC), stopped sending funds for office operations in August 2010. SMEC’s decision to stop funding was linked to the lack of interest shown by CMEC and ADB to pour in money in the mega project. SMEC, as the major promoter, has invested over $ 31 million in the project over the last decade.
Source: Kantipur
By the looks of things, West Seti Hydropower Company Limited (WSHPL) is all set to lose its license for the 750 MW West Seti project.
Energy Minister Gokarna Bista on Sunday said the government is planning to scrap the license awarded to the company. “We have asked the company to furnish clarification on why should it not be closed,” said Bista. “If it fails to come up with a reasonable reply within the next 15 days, the government will move ahead with the licence scrapping process.”
As the project’s construction work has not moved ahead for a long time, the government has almost made up its mind not to extend WSHPL’s survey license.
Failing to get the much needed resources, WSHPL had proposed building the project under Public Private Partnership (PPP) model in January this year. The company had filed an application at the Department of Electricity Development (DoED) seeking extension of the deadline for financial closure of the project and also sought the government’s involvement in the project.
However, indicating that it would not extend the deadline, the Ministry of Energy (MoE) had sought clarification from WSHPL for its failure to proceed with the construction of the project based in located in Doti and Dadeldhura districts.
The company had received the licence in 1997 under the build-own-operate-transfer (BOOT) model. However, it has not been able to move ahead with the construction of the project whose estimated cost is Rs 120 billion.
The project was originally designed as an export-oriented one, with 90 percent of the power to be exported to India. WSHPL had signed an agreement with the government 16 years ago to this effect. Australia’s Snowy Mountains Energy Corporation (SMEC) was the major promoter of the project.
The cash-strapped project got a boost when the China National Machinery and Equipment Import and Export Corporation (CMEC) decided to invest in it. CMEC even signed an agreement with WSHPL during then Prime Minister Madhav Kumar Nepal’s China visit in 2009. CMEC President Jia Zhiqiang and WSHPL Director Pandey had signed a memorandum of understanding in Beijing. The Chinese firm had decided to invest Rs 15 billion in the project.
However, CMEC later opted to pull out of the project saying that Nepal lacks an investment-friendly environment. Another important shareholder of the company, Asian Development Bank, also did not show interest citing lack of public acceptance of the project and lack of good governance.
The project received yet another a jolt when the main promoter of the company, Australia’s Snowy Mountain Engineering Corporation (SMEC), stopped sending funds for office operations in August 2010. SMEC’s decision to stop funding was linked to the lack of interest shown by CMEC and ADB to pour in money in the mega project. SMEC, as the major promoter, has invested over $ 31 million in the project over the last decade.
Source: Kantipur
