Govt to review 1,300 survey license applications

In a bid to give impetus to hydropower development in the country, the government is reviewing additional 1,300 survey license applications of hydroelectric projects with a collective installed capacity of around 10,000 megawatts.
The Department of Electricity Development (DoED), a government entity that issues licenses to hydropower projects, has said it would complete the review of all 1,300 applications within the next couple of months.
"We will decide on issuing licenses to applicants after completion of the review," Gokarna Raj Pantha, a senior divisional engineer and spokesperson at DoED, told Republica. The move, according to Pantha, is part of the government´s plan to discourage the tendency of holding licenses without putting in serious efforts to develop hydro projects.
DoED, which has already cancelled 565 survey applications in the last couple of months, is serious about identifying genuine hydropower developers.
Pantha said applications currently under review were registered at DoED over the last seven years. "None of the application was registered after the government increased the survey license fee," Pantha added.
The government had earlier increased survey license fee in October 2012.
"As per my understanding, only 100 to 200 survey license applications will be approved," Pantha said.
As of now, DoED has said it would approve survey licenses of those projects that are willing to deposit fees as per the revised fee structure.
"Though the applications were registered prior to revision of fees, applicants will have to refer to the revised fee structure to obtain licenses," Pantha said.
The new fees are: Rs 1 million for 1MW to 5MW projects, Rs 2 million for 5 MW to 10 MW, Rs 3 million for 10MW to 25MW, Rs 4 million for 25 MW to 100 MW, Rs 5 million for 100MW to 500MW and Rs 6 million for hydro projects above 500 MW capacity.

SN Power forms PDA negotiation team

SN Power, a Norwegian power involved in the development of Tamakoshi III (650 MW) hydropower project, has formed a six-member project development agreement (PDA) negotiation team.
The formation of PDA negotiation team right after SN Power signed project negotiation agreement (PNA) with the Investment Board Nepal (IBN) indicates that the Norwegian form is serious about developing the project.
"SN Power has sent a letter to IBN including details of the members in the PDA negotiation team,” a source privy to the issue told Republica.
The team includes Dr Sandeep Shah, vice president and country director of SN Power; Stale Rustad, project director for Asia of SN Power; Daniel Seeger, legal counsel; Christian Knoph, director, project finance; Ronald Storhammar, finance director; and Apar Neupane, business manager.
"We will be supported by Sinha Verma Law Concern´s senior advocate Anil Kumar Sinha and Rajeshwor Shrestha in the negotiations," reads the letter sent by SN Power to IBN. "We may add other resources in the team as per the requirement."
Confirming the development, Radhes Pant, CEO of IBN, said SN Power has sent the details of its PDA negotiation team.
According to the source, the first round of negotiations will take place on May 27.
IBN has already formed PDA negotiation team on its part. The team includes Pant, Mukunda Prasad Paudel, joint secretary at IBN; Anup Kumar Upadhyay, director general at the Department of Electricity Development (DoED); Baikuntha Aryal, joint secretary at the Ministry of Finance; and Keshab Dhoj Adhikari, joint secretary at the Ministry of Energy.
IBN and SN Power had signed PNA couple of weeks ago. As per the PNA, the developer should complete PDA negotiation within the 18 months of the signing of PNA.
SN Power had got survey license for the project in 2007.
According to the letter sent by SN Power, Shah and Rustad will be leading the negotiation from their side. Pant will lead the government side in the negotiation.
The development will get generation license after the PDA is signed.
Environment Impact Assessment (EIA) of the project, which is estimated to cost Rs 120 billion, has already been done.

Indian state govts against bilateral trade: Experts

Activities of Indian state governments that go against the spirit of bilateral trade agreement are affecting Nepal-India trade, experts said on Tuesday.
“Nepali exporters are facing different hurdles due to intervention by the Uttar Pradesh government," Prof Bishwambher Pyakuryal, a seasoned economist, said. “The cost of economic non-cooperation is very high in the region. It´s even higher in the bilateral trade.”
Speaking at a workshop on ´Breaking Down Barriers to Regional Trade and Cooperation in South Asia´ here on Tuesday, Pyakuryal said the union government of India should clarify these issues. “We have been told by leaders of Uttar Pradesh to contact them rather than officials of the union government. Is this what we need to do?” he questioned.
The workshop, which was organized jointly by the South Asia Watch on Trade, Economics and Environment (SAWTEE), and International Finance Corporation (IFC), mainly focused on non-tariff barriers.
“The non-tariff barriers are intense than the tariff barriers in the South Asia region," Dr Posh Raj Pandey, trade economist and chairman of SAWTEE, said.
Highlighting the major issues behind low intra-regional trade, Pandey spelled out three types of deficit lurking in the region. “Trust deficit, trade deficit and institutional deficit are pulling us back," Pandey said. "We have to work on first increasing the trust among us and enhance the institutional capacity."
There is deficit in many areas, Dr Ratnakar Adhikari, regional trade expert at SAWTEE, said. “Infrastructure deficit and vision deficit are the other factors hindering regional trade. The trade barriers in this part of the world are unique and we have to handle them with care," Adhikari said.
Nepal has comparative edge in hydropower but that has not been realized yet. Tasheen Sayed, country manager of the World Bank, said that there should be investment in the development of cross-border infrastructure such as transmission lines. "Nepal can benefit from the energy sector," Sayed said. "World Bank is focusing on development of transmission lines in the cross-border area between Nepal and India.”
Meanwhile, David Gould, chief economist at the South Asia Region Office of the World Bank, presented a paper on ´Regional Trade and Cooperation in South Asia´.
"The asymmetry of the size of the economy in the South Asia Region is also a major reason for low intra-regional trade," Gould said in his paper.

Nepal-Canada Business Executive Committee formed

Nepal-Canada Business Executive Committee (NCBEC) was formed here on Monday aiming to further strengthen bilateral trade and investment.
The committee was launched in the presence of high-level government officials, Ambassador of Canada to Nepal Stewart Beck and business people from both the countries.
"This forum will help us to attract investment from Canada," Suraj Vaidya, president of Federation of Nepalese Chambers of Commerce and Industry (FNCCI) said after the launch of NCBEC.
Gyanendra Lal Pradhan, executive member and chairperson of energy committee at the FNCCI; Om Bahadur Rajbhandari, executive member and coordinator of urban development forum at the FNCCI; Chandra Prasad Dhakal, executive member and coordinator of investment promotion forum at the FNCCI; and Ritu Vaidya of Vaidya´s Organization of Industries and Trading House are the members in the committee from Nepali side. Similarly, members from Canada in the committee are Pramod Radhakrishnan of IRD, Pradeep Kumar of Lea Associates, and Alisa Kreynes of Manitoba Hydro.
"I am quite hopeful that this forum will take forward trade and investment relationship between the two countries,” Ambassador Beck said.
Beck, who is leading the Canadian delegation in Nepal, expressed optimism that Nepal´s investment climate will get better in course of time.
The delegation is looking for investment avenues in sectors like infrastructure, waste management and hydropower.
The delegation comprises representatives from eight Canadian firms -- Arcop Associates, Bombardier, Indo-Canadian Business Chamber, IRD Inc, Lea Associates, Manitoba Hydro International, Premiertech Aqua, Ballard Power Systems.
Meanwhile, Radhes Pant, CEO of Investment Board Nepal (IBN), briefed the delegation on country´s economic outlook and potential areas that are in need of foreign investment. “We are doing series of policy reforms to welcome foreign investment," Pant said, highlighting the government´s move to attract FDI in the country.
According to the Department of Industry (DoI), Canadian firms have invested Rs 5.08 billion (approximately US$ 57 million) in 25 Nepali enterprises as of fiscal year 2010/11. These firms have created 1,926 jobs.

NBF discusses measures to ease energy crisis

The Nepal Business Forum (NBF), a mechanism created to promote public-private policy dialogue, held its eastern regional business forum (ERBF) meeting in Biratnagar on Sunday, recommending implementation of five issues raised in the forum.
ERBF is co-chaired by the regional administrator for the eastern development region on behalf of the government and the president of the Eastern Regional Chamber of Commerce and Industries on behalf of the private sector.
Major issues raised in the meeting were allocation of budget for ERBF to operate it effectively in the coming fiscal year, removal of hurdles in the export of agro products, making Nepali and Bangladeshi currency convertible, promotion of agro products by developing market linkages and establishment of company registration desk in eastern region which will ultimately facilitate businesses of the private sector, says a statement issued by NBF.
During the meeting, the issue of multi-fuel power plant was also discussed, while the private sector asked the government to develop dedicated line citing the eastern region and the Biratnagar industrial corridor were critical to the overall economic health of Nepal.
To maintain the supply of power to this critical area, the meeting discussed the rehabilitation of the multi-fuel plant at Duhabi and building of transmission lines to and from India to ease the current energy crisis, says the statement.
The meeting also discussed establishment of Integrated Customs Point in Biratnagar, formation of special economic zones and strengthening of industrial security, the statement further says.
With a mandate to cover ´doing business´ issues in 16 eastern Nepal districts, ERBF has been organizing public-private dialogue by bringing in 22 chambers into the regional forum.

Tenants of industrial estates start protest against IEML

Tenants of the country´s 11 industrial estates will go on protest against the government from Monday. They are protesting the government´s unilateral decision to increase rent of land and buildings inside the industrial estates.
“We will begin our protest form Monday as the government has turned deaf ear to our demand of reviewing the rent hike decision,” Shailendra Lal Pradhan, president of Federation of Industries in Nepal Industrial Estates (FINIE), said.
The businessmen operating factories inside industrial estates were agitated after Industrial Estate Management Limited (IEML) -- the authority overseeing the management of industrial estates -- increased the rent going against the agreement that it reached with FINIE in January.
IEML had raised rent of land and buildings inside industrial estates in January as per the understanding reached with IEML officials. “But later it increased the rate going against the understanding,” Pradhan said. “This is not acceptable.”
FINIE had asked the government to review the decision by Sunday. “Our demands, however, have not been addressed so far,” Pradhan told Republica over phone.
Meanwhile, IEML has invited FINIE officials for talks. "We will sir for talks,” Pradhan said, adding that the rent hike decision should be scrapped unconditionally.
The federation has set programs like submitting memorandums to industry minister and industry secretary, urging political parties for solidarity, and stop paying rent to IEML.
According to the statistics compiled by MoI, 11 industrial estates cover 5,128 ropanis of land in places like Balaju, Patan, Hetauda, Dhanusa, Nepalgunj, Pokhara, Butwal, Bhaktapur, Biratnagar, Dhankuta and Saptari.
Officials of the federation also lambasted IEML for ineffective management of industrial estates. “Industrial estates even don´t have load-shedding schedule. We don´t know when electricity comes and goes,” Pradhan said, “Security at industrial estates is also not satisfactory.”
Private sector has made investment of more than Rs 13 billion in industrial estates. Factories in the industrial estates employ around 25,000 people, according to the federation.

West Seti hydro project likely to fall in limbo

China Three Gorges Corporation, a Chinese power developer involved in development of much-delayed 750-megawatt West Seti hydropower project, has maintained conspicuous silence on development of the project in the last six months.
"No communication has been held with the developer since last October," a source privy to the Investment Board Nepal (IBN) told Republica.
The corporation had dispatched a team of experts to conduct preliminary study of the project site last October. At that time, the team had promised to discuss future plans within next couple of months.
"It has not shown much interest in the project since then," the source disclosed. "IBN officials claim they had video conference with corporation officials but since nothing has materialized in more than six months we have no grounds to believe the conference--if it was ever held--was fruitful.”
The IBN that received authority to facilitate project implementation from the government also confirmed that it has not heard from the corporation. "We are waiting for their response," Radhesh Pant, chief executive officer of the IBN, told Republica over the phone on Saturday. "We are hopeful they will soon communicate and come up with a financial report."
The 18-year-old project has always made locals dream of a prosperous far western region--where the project is located. But the latest development has disappointed them as the project seems to be falling in a limbo even after the government established a separate high-level entity, IBN, to fast track the implementation of the mega project.
"No one has shared any information about the project since last year," Ratan Saud, president of West Seti Concern Group, a pressure group formed by locals, told Republica. "We are now worried about the future of the project."
Officials at the Office of the Prime Minister and Council of Ministers (OPMCM) also expressed pessimism about development of the project in the near future.
"China is in the wait-and-see mood to make investment in Nepal as the country is going through a transitional phase," a high-ranking OPMCM official said requesting anonymity. "It had expressed enthusiasm to invest before May 2012--before the demise of the Constitution Assembly on May 27. The Chinese developer´s mood has changed since then and is not that interested in project implementation."
Earlier, China´s Exim Bank had expressed interested to finance the project and had proposed Nepal to take commercial loans.
West Seti is one of the priority projects of the government. Through this project, the government aims to supply up to 150 MW of electricity in the western industrial corridor, while the remaining power would be used to fulfill domestic power demand.