China Three Gorges seeks govt position pronto

  • West seti hydel project

  • Writes to Energy Ministry warning to pull out of the 750 MW project

KATHMANDU, MAR 19 -

China Three Gorges International Corporation (CTGI) has asked the government to clarify its position following the parliament’s Natural Resources and Means Committee’s directive not to implement the memorandum of understanding (MoU) it signed with the Ministry of Energy (MoE) on the West Seti Hydroelectricity Project.

The Chinese company has even warned of pulling out of the 750 MW project that the two sides signed last month.

In a strongly worded letter to the Ministry of Energy, dated March 16 and obtained by this newspaper on Sunday, CTGI has said that it is concerned over the decision of the parliamentary panel and has sought the government’s position on the controversy.

“We are very concerned to learn that the Natural Resources and Means Committee of the Legislature- Parliament has directed to suspend all activities in connection with the MoU,” states the letter sent to the MoE. “We request you to urgently clarify the situation and advise us further so that we can take necessary measures/actions for reallocation of our time and resources.”

“We can’t afford to lose CTGI at any cost because there is no other option to develop West Seti,” said Arjun Kumar Karki, the spokesman and joint secretary at the Ministry of Energy. “We will ask CTGI to suspend the primary works for a while. But they should get a signal soon as we are confident about convincing the parliamentary committee about the merit of the project.”

According to Karki, the MoE will send its response to CTGI on Monday stating that the political parties, particularly the UCPN (Maoist) and the CPN-UML, are in favour of the project.

The parliamentary panel on March 10 had directed the government not to implement the MoU for the time being, stating that the deal was “non-transparent” and had “vested interests.” It formed an 11-member probe committee to review the MoU.

The parliamentary panel had questioned the proposed modality of investment and equity sharing in the government-CTGI deal. The agreement, according to the MoE, is in accordance with the Electricity Act and therefore within the existing legal framework. Clause 35 of the act allows the government to enter into a contract for generation, transmission or distribution of electricity with any company.

Terming the parliamentary panel’s decision an “unexpected development”, CTGI said that it had chosen West Seti over many other opportunities in other countries as it had been labelled a national priority project and Nepal’s national leaders had given assurances for its commissioning. CTGI took the initiative on West Seti with the belief that its initiative for realisation of the project of national importance for Nepal was going to be considered as a very welcome step based on interactions with and assurances received during our interactions with many national leaders prior to the MoU, the letter said.

The Chinese company has asked the government to advise it officially so that the two sides could “mutually agree to abandon the project…” 

“We would, therefore, appreciate to be advised officially by you if that is not the case so that we, in such case, can mutually agree to abandon the project before the government of Nepal,” the letter states.  CTGI has already suspended its planned visit to the West Seti site and other activities, which were supposed to start this week.

High-level officials from CTGI were scheduled to make a field visit to the project site in Dadeldhura and revisit the earlier feasibility study prepared by Australia’s Snowy Mountains Energy Corporation (SMEC).

Meanwhile, the probe committee formed by the parliamentary committee has decided to seek a 10-day extension of its tenure, which comes to a close on Tuesday.

It has termed CTGI’s letter as “pressure tactics”.

After the government scrapped the survey licence given to West Seti Hydropower Limited, a private sector company supported by Australia’s SMEC,  last year for lack of progress on the project, it has been on the lookout for another company to implement the project.

Subsequently, the government inked a deal with CTGI to develop the project under the public private partnership (PPP) model through a ‘special-purpose vehicle’, which allows the government to carry out a development project on through a fast-track approach. As per the MoU singed last month, CTGI will have a 75 percent stake while the Nepal Electricity Authority will own the rest. CTGI will also provide 2 to 5 percent of its shares to locals living around the project site.

Timeline

July 27, 2011    :  Govt scrapped license of West  Seti Hydropower Company Limited

Feb 29, 2012    : Govt, China Three Gorges sign MoU

March 10, 2012    : Parliamentary Panel asks govt not to implement MoU for time being

March 16, 2012    : China Three Gorges writes to govt to clarify its position

 

 

Posted on: 2012-03-19 08:24