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SMEC signs power deal with Indian Co
KATHMANDU, DEC 10 - The Power Trading Corporation of India (PTCI) and Snowy Mountain Engineering Corporation (SMEC) of Australia have entered into the Power Purchase Agreement (PPA) concerning the 750-megawatt West Seti Hydropower Project (WSHPP).
The project is being built at the cost of US$860 million, and will take seven years to complete.
According to the agreement, the power will be sold to PTCI at the rate of Rs 3.60, which is cheaper than the rate agreed to in the case of the Bhote Koshi project.
The papers pertaining to the deal were formally handed over to the Department of Electricity Development on Tuesday.
The agreement signed between the Nepal government and SMEC allows the latter to trade power for the next 30 years, which will be followed by the transfer of the project to the government "on where is as is basis". The SMEC had got the license in 1994 for the project which entails a huge reservoir.
The project straddling the districts of Doti, Achham and Bajhang in some way or the other will see commencement of the civil works by the end of this year. In fact, the construction will commence once the Central Electricity Authority of India gives the final clearance to the project.
"The clearance may come in four months," said Director General of the Department of Electricity Development Lekh Man Singh Bhandari to The Kathmandu Post attributing the remarks to Indian representatives.
He also said that the project was delayed by the fact that the agreement concerning power purchase was not in place. SMEC shall apportion the Nepalese side 10 percent of the power generated free of charge and pay 2.5 percent royalty.
Meanwhile, a separate project is on the anvil to ensure the supply of power generated to India. In fact, SMEC has suggested Madi (86 megawatts) and Upper Seti (122 megawatts) for this. Both projects are known for their highest peak load power generation. Since the West Seti is a reservoir-based project, the prospective projects that SMEC is mulling over are also billed to be of the same nature.
"SMEC has emphasised on the Upper Seti," Bhandari further said, adding the decision of the government is expected in a few days. Bhandari also disclosed that the power over and above 75 megawatts would be sold to Nepal Electricity Authority (NEA), adding that the transaction would be in US dollar until the loan is paid back, and in Nepalese rupees after that. The cost benefit analysis of the project has put the benefits based on export at 2.02 percent.
Bhandari also said that SMEC was already looking for investors, and that power generation licence would be issued once the source of funding would be identified and submitted. He also said that SMEC was expecting 16 percent return on investment.Posted on: 2003-12-11 04:46
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