BY THIRA L BHUSAL
KATHMANDU, Sept 27
The government has taken the 750-MW West Seti Hydroelectric Project (WSHP) as a test case for its ability of achieving the target of generating 10,000 MW of hydro-electricity in the next 10 years.
If the West Seti project fails, the government's policy of speeding up hydro-electricity generation and attaining the set target will be in trouble, Secretary at the Ministry of Water Resources (MoWR) Shankar Koirala said at an interaction on WSHP, Friday.
The government of Nepal and West Seti Hydro Limited signed the initial agreement on the project in 1994 but the project has been delayed because of the conflict and political uncertainty in the country. The final agreement before construction work begins is expected to be signed early in 2009. The government and the Asian Development Bank (ADB) are negotiating some clauses of the final agreement.
Finance Minister Dr Baburam Bhattarai, while presenting the annual budget on September 20, set out a target of producing 10,000 MW of hydro-electricity in next 10 years.
Minister for Water Resources Bishnu Poudel has affirmed the government's commitment to the project. "The government will not back out from the project," he said.
"Backtracking from the project would be a serious matter because it has already taken embryonic shape and we do not want to abort it," Poudel said.
SMEC Developments Pvt Ltd, a member of the SMEC Group of Australia, is the promoter of the $1.6 billion project and has a 26 percent share in it. The Nepal government has a 15 percent share, to be financed with a loan from the ADB. Chinese and Indian companies will have 15 percent share each and the remaining 14 percent will be owned by Nepali investors including locals at the project site.
Ninety percent of the 750 MW generated will be sold to India while Nepal will get the remaining 10 percent free of cost.
At the interaction between critics of the project and promoters on Friday locals from the affected area complained against 'promoter apathy', the lack of transparency and of people's participation in the decision making process.
MoWR Secretary Koirala suggested the promoters ensure local participation in the decision making and other activities as far as possible.
People from several VDCs in Doti, Dadeldhura, Baitadi and Bajhang districts in the Far-Western Region will be affected by the project reservoir.
The SMEC has said it plans to rehabilitate about 1,383 affected families from the proposed reservoir area in the Terai. Around 186 families living in the vicinity of the proposed power house and transmission line need to be relocated. The promoters have said they will adopt internationally accepted practices for the rehabilitation.
Over 3,400 people will get employment for the five and half years of the construction period and at least 200 people will have permanent jobs during the project's operation.
Critics of the deal have also criticised the government for awarding the project with less benefit accruing to Nepal in comparison with the 402-MW Arun-III and 300-MW Upper Karnali where promoters agreed to provide 22 and 12 percent free electricity respectively to Nepal.
"We should not think of it in the present context because this agreement signed in 1997 when we had had no benchmark to follow," Koirala said. "It was an important achievement at the time.
"Review needed: Secretary
Secretary Koirala, however, said it was time to review the agreement in view of the changed context over the last 12 years. He said the government would give utmost priority to national, regional and local interests at the time of revision.
The project has said that a higher tariff would be set given the changed context. Earlier, it was agreed that power would be sold to India at the rate of 4.95 US cents per kilowatt-hour.
The project will be built under the build, own, operate and transfer (BOOT) model and will be handed over to the government of Nepal after 25 years of operation by SMEC. Nepal will earn over Rs 2 billion as royalty during the 25-year period, according to the promoters.
Water resource analyst Ratna Sansar Shrestha, making a presentation on the project, claimed that most of the benefits will go to India like flood control and dry season augmented flow while Nepal will face the costs of the project like restrictive use of water in upstream areas.
THE KATHMANDU POST
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