CPN-Maoist threat worries GMR

Indian power developer GMR, which is also the promoter of the 900MW Upper Karnali Hydropower Project, has expressed grave concern over the recent decision of the CPN-Maoist to launch “ "strugg”e" against projects being developed by Indian companies.“
"GMR has expressed its concern in writing," a source at the prime minister´s office told Republica, adding the Indian company has asked the government to pay serious attention to the CPN-Maoist decision and provide adequate security at the project site. As per the agreement with the government, the Indian company has to complete the Upper Karnali Hydropower Project by 2016.
The Bheri-Karnali state committee of the CPN-Maoist has decided to form a security squad to chase away GMR officials. According to Kalendra Sejuwal, Surkhet based reporter of Republica, the state committee took such a decision to safeguard the sovereignty of the countr“. "The party has been keeping a close eye on projects that have been awarded to Indian companies," Sejuwal said quoting Bharat Bam, secretary of the Bheri-Karnali state committee of the CPN-Maoist.
Meanwhile, Pampha Bhusal, spokesperson for the CPN-Maoist said the party was totally again“t "projects that do not serve national intere”ts". She further added that the people of Karnali are against the project and that the party supports the“. "The project was awarded to GMR without competitive bidding.
Also, the company does not aim to run the project in full capacity. Upper Karnali can generate more than 4,000 MW of hydroelectricity project," she told over phone to Republica.
The GMR also has forwarded its letter to the Investment Board of Nepal (IBN). The IBN, however, has so far not responded to GMR´s concern.“
"The IBN has not yet responded as how it would protect the project from the so-called nationalists," said an official at the prime minister´s office.
Radesh Pant, CEO of IBN could not be contacted for comments despite several attempts. The government has awarded Upper Karnali Hydropower Project to GMR under the build-own-operate-transfer (BOOT) model.
Additionally, other foreign power developers also have expressed concern over the situation in the country. "Other developers have not come up with formal letters but they also share similar concerns," said the official.

Maoist faction's protest puts SEZ law in limbo

Although Special Economic Zone (SEZ) has long been acknowledged as one of the major vehicle for luring foreign investment and giving boost to exports, efforts of the industry ministry to enact SEZ Bill have failed even though the same was endorsed by the cabinet three years ago.

Initially, the lack of clarity over social protection and objection of trade union on provisions like ´no extreme forms of strikes´ in the zone had prevented its ratification. Now that trade unions have softened their stance on the bill, MoI was hopeful of getting the bill endorsed by the parliament.

However, its bid to retable the bill in the parliament has hit yet another roadblock. A faction of ruling UCPN (Maoist) has strongly protested it, terming it as an ´anti-national´ document. Maoist Chief Whip Dev Gurung has even warned of stalling the parliament if the MoI tabled it.

“After gathering dust in the parliament for three long years, we had taken steps to reintroduce the bill in the parliament, hoping positive outcome due to changed political context,” said industry minister Anil Kumar Jha.

However, Jha has rolled back his initiative following such strong-worded reaction from Gurung.

The Maoist party´s resistance has come despite Prime Minister Baburam Bhattarai´s clear statement that the bill was crucial to lure some $1 billion worth of foreign investment that he has targeted to achieve in the Investment Year 2012/13. Bhattarai is also the vice-chairman of UCPN (Maoist).

Bhattarai has also cited its enactment as one of his priority works in the Immediate Action Plan (IAP) for Economic Growth and Prosperity. “The bill of SEZ will be immediately approved by the Parliament,” reads the IAP.

Jha said Gurung´s reaction was surprising, mainly as it contravenes with what his own party leader has said.

Gurung, however, said his party has different opinion about the bill. “First, it was prepared by the World Bank. Secondly, it damns labors´ rights and protection of natural resources. It is not acceptable to us,” Gurung stated.

He even ruled out the necessity of SEZ law, arguing that there were already multiple laws in the country to encourage inward flow of foreign investment and exports.
However, officials having knowledge on the contents of the bill, said Gurung´s reaction was based on his naivety. “Obviously he has not studied the bill. Otherwise, he would have known, the bill protects the labor rights and is sensitive to other issues as well. If that was not the case, trade unions won´t have agreed to it,” a senior official at industry ministry said.

Rameshwar Khanal, economic advisor to the PM, agreed with him. “The only difference is that the SEZ bill does not allow workers to halt productions while striking. Otherwise, the labor rights, including collective bargain, are all protected in the bill,” he added.

The latest objection by the UCPN (Maosit), meanwhile, has deferred yet again the chances of early operationalization of already built SEZ and infrastructures, including SEZ in Bhairahawa, for which the government has already spent millions of rupees. It has also put the fate of other proposed SEZs, including those in Birgunj, Panchkhal, Jhapa and Dhangadhi, among others in limbo.

If the government dragged feet on enacting the law, officials stated it would adversely impact the Investment Year as well. “Deferring the long-committed law that pledges minimum basic assurances to investors will only taint our image. In such a situation, how can we push our case strongly to lure foreign investment?” wondered the MoI official.