Govt belatedly assigns West Seti to Investment Board

Following controversy surrounding the signing of a memorandum of understanding (MoU) with the Chinese power developer Three Gorges on the 750 MW West Seti Hydropower Project, the government on Monday asked the Investment Board to take up the project enabling the latter to take further decisions on its development.
Although officials did not explicitly explain how it could impact the deal that Minister of Energy Post Bahadur Bogati inked with Three Gorges, sources said the Prime Minister´s Office has entrusted the board to take all required decisions on the project. This means it can review and even revoke it if it deems appropriate.
Legally, the whole deal of West Seti should have been handled by the board since the very beginning, as its Act clearly entrusts the board to handle the large projects, including hydropower projects of over 500 MW. “Ignoring the board while signing the MoU was a mistake in itself,” a senior official at Prime Minister´s Office told Republica.
Now that the board has been assigned to take up and steer the project´s development, he said the board will have all the authority to decide on the project.
Following the government´s signal, the board on Monday began assessing every communication made in the past between the governments of Nepal and China, and also China Three Gorges Corporation. “We are also studying the MoU in order to figure out how to move forward,” said a source at the Board.
However, as the board was unaware of interest of the Chinese government, particularly how it would react if Nepal government wanted to make some changes or scrap the MoU. “We don´t want to hurt China´s sentiment for we are still eyeing the soft loans from the Chinese Exim Bank for developing the project. MoU has complicated matters for us,” said the source.
During the bilateral communications, Investment Board is also planning to request China to resume negotiations on a soft loan of US$ 1.6 billion -- the identified project cost of West Seti for which Ministry of Finance was negotiating till recently.
“We are still discussing what will be the best model for West Seti development. Nonetheless, we are making request for resumption of talks for soft loans because we want to keep all the options open,” said the source.
"Our whole efforts at present aim at two things; one is to make the project happen, and the other is to maximize the benefits for country," he told Republica, adding how the board will steer the project will become clear only after it talks with Chinese officials, mainly those based in Kathmandu.
Meanwhile, the board on Monday wrote to the sub-committee formed by the parliament´s Committee on Natural Resources and Means to probe West Seti MoU that the board was ready to take up the project with high priority if it is brought under the board´s jurisdiction after requisite amendment and revision.