ADB shows interest to invest in Sunkoshi II, III hydro projects

After providing soft loan worth US$150 for the development of reservoir-type 140-megawatt Tanahun hydropower project, the Asian Development Bank (ADB) has expressed interest to invest in development of two large hydropower projects, namely, Sunkoshi-II (1,110 MW) and Sunkoshi-III (536 MW).
´A team of the ADB completed field studies of the two projects this week,´ a source at the Department of Electricity Development (DoED) told Republica on Saturday. ´The ADB and the DoED are also holding preliminary-level discussions on development of the projects.´
According to the source, the DoED had shared proposals of the two projects with the ADB few weeks ago. ´Since then, the ADB has conducted field studies,´ the source said.
The source also informed that the investment modality and loan amount for the two projects based in Ramechhap district would be finalized in the near future.
Confirming the development, Gokarna Raj Pantha, senior divisional engineer and spokesperson at the DoED, said the ADB has principally agreed to develop the projects.
´The DoED and the ADB will sit for negotiations in the near future,´ Pantha said. ´The ADB is also interested in investing in the renewable energy sector in the region.´
The government has included Sunkoshi-II and Sunkoshi-III projects in its Hydropower Master Plan. Both the projects are classified as run of the river.
The ADB, which has already expressed commitment to extend a soft loan to develop Tanahun hydropower project, has said it would be interested in increasing its investment in the country"s hydropower sector, according to Pantha.
Meanwhile, the government has started conducting studies of eight other projects. These projects include: Bheri Babai (48 MW) in Surkhet, Budhi Ganga (22 MW) in Accham, Chepe Khola (8.27 MW) in Lamjung, Dotighad (5.78 MW) in Dadheldhura, Ikhuwa Khola (8.1 MW) in Shankhusawa, Kabeli-III (12 MW) in Taplejung, Madi Khola (12.25 MW) in Rolpa and Nalsyaugad (400 MW) in Jajarkot.

NEA unions protesting Upper Trishuli 3A upgrade reject talks

The four employees union of the Nepal Electricity Authority (NEA) that have launched protest against the NEA decision to upgrade the 60 MW Upper Trishuli 3A Hydropower Project to 90 megawatts refused to sit for talks with the NEA management Saturday. The unions say they will not stop the protests until the upgrade decision is scrapped.
´We have just one demand and the NEA management cannot fulfill it,´ Ram Prasad Rimal, chairman of the NEA Employees Union, said. ´We demand that the decision to upgrade the project should be scrapped.´
The four employees" unions launched protest last Friday. ´We want to make it clear that talks are not necessary. The government can simply scrap the upgrade decision and we will immediately end protest and resume work,´ Rimal said.
The NEA management had invited the unions for dialogue regarding the NEA board"s decision to upgrade the capacity. ´The management said that it wanted to provide us additional information regarding the upgrade decision but we are not interested,´ Rimal told Republica on Saturday.
´We have further intensified the protest programs as the government didn"t listen to our demand so far,´ Rimal said.
The four employees" unions include: NEA Employees Association, NEA Employees Unions, NEA Employees Council and Nepal National Employees Association.
Explaining the details of the protest programs, Rimal said they would cut power supply to the ministerial quarters in Pulchowk for two hours from 10:30 am on Sunday. ´We will also cut power supply to the NEA head office for four hours Sunday and stage pen down protest throughout the day,´ Rimal said. ´The employees" unions have decided to stage a pen down protest for four hours in all NEA offices across the country.´
The controversial decision to upgrade the capacity of the project has been criticized from various quarters including by former energy and finance ministers. Senior leaders including central committee member of the Nepali Congress (NC) Dr Ram Sharan Mahat, central committee member of NC Prakash Sharan Mahat, politburo members of CPN-UML Surendra Pandey and Gokarna Bista and senior leader of the Rastriya Prajantra Party Dr Prakash Chandra Lohani have jointly submitted a memorandum to the chairman of the interim election council Khil Raj Regmi to revoke the upgrade decision Thursday.
In their six-point memorandum, the leaders have argued why the project should not be upgraded. ´The project"s upgrade is not in the interest of the country,´ reads the memorandum. ´Upgrading the project"s capacity will further deepen the load-shedding problem in the country.´
Upper Trishuli 3A is a run of the river project being developed by the NEA with China Gezhouba Group Company Limited as contractor. The Exim Bank of China has provided soft loan of US$ 89 million for the project.

Former ministers ask govt to halt upgrade

Senior leaders representing major political parties except UCPN (Maoist) have urged the government to immediately withdraw the decision to upgrade the capacity of Upper Trishuli 3 ‘A’ Hydropower Project.
Leaders, including central committee member of Nepali Congress (NC) Dr Ram Sharan Mahat, former energy minister and central committee member of NC Prakash Sharan Mahat, politburo members of CPN-UML Gokarna Bista and Surendra Pandey and senior leader of Rastriya Prajatantra Party Dr Prakash Chandra Lohani met the chairman of the interim election government Khil Raj Regmi at Singha Durbar on Thursday afternoon to exert pressure on the government to withdraw upgrade decision.
The leaders in a memorandum to Regmi have requested him to do the needful to stop implementation of the upgrade decision. The leaders have also said kickbacks were involved in the upgrade decision.
Responding to the group of leaders, Regmi assured that the government would investigate if there had been financial irregularities in the run up to the upgrade decision. “I have already asked the concerned authorities to take necessary steps to investigate the issue and halt the upgrade if any irregularities are found,” Dr Mahat said quoting Regmi.
In the six-point memorandum, the leaders have argued why the project should not be upgraded. “The project’s upgrade is not in the interest of the country,” reads the memorandum. “Upgrading the project’s capacity will further deepen the load-shedding problem in the country.”
Upper Trishuli 3A is a run of the river project being developed by the Nepal Electricity Authority with China Gezhouba Group Company Limited as contractor. The Exim Bank of China has provided soft loan of US$ 89 million for the project.

File on Upper Trishuli 3A upgrade at CIAA

The Commission for the Investigation of Abuse of Authority (CIAA) has finally spoken on the government’s controversial decision to upgrade the capacity of the 60 MW Upper Trishuli 3 ‘A’ Hydropower Project to 90 megawatts.
According to a source close to the Ministry of Energy (MoE), the CIAA has written to the ministry on Wednesday seeking details of the January 3 cabinet decision that decided in principle to go for an upgrade.
“Please, send a copy of the cabinet decision of January related to Upper Trishuli 3 ‘A’ to the CIAA,” reads the CIAA letter sent to the ministry. Following the CIAA request, the ministry sent a copy of the cabinet decision to the CIAA.
“The ministry has replied to the CIAA on Thursday,” the source revealed.
The source further disclosed that Energy Minister Uma Kant Jha and Energy Secretary Hariram Koirala had held a meeting with CIAA chief Lok Man Singh Karki before the NEA board of directors last week endorsed the cabinet decision. Minister Jha is also the chairman of the NEA board.
Both Secretary Koirala and Minister Jha when contacted by Republica refused to comment on the meeting.
“Based on the information I have, the decision to upgrade the capacity of the project was made after receiving CIAA’s nod,” the source said. “Despite giving nod to the upgrade decision, the CIAA has sought details of the cabinet decision.”
Baburam Bhattarai was prime minister when the cabinet in January decided to upgrade the project.

Leaders to discuss Trishuli 3 'A' with Regmi

Top leaders of the major political parties, except UCPN (Maoist), are meeting Chairman of the Interim Election Council Khil Raj Regmi, on Thursday to draw his attention to the recent decision of Nepal Electricity Authority (NEA) to upgrade the capacity of Upper Trishuli 3 ´A´ hydropower project from 60 to 90 megawatts.
Leaders, including central committee member of Nepali Congress (NC) Dr Ram Sharan Mahat, former energy minister and central committee member of NC Prakash Sharan Mahat, politburo members of CPN-UML Gokarna Bista and Surendra Pandey and senior leader of Rastriya Prajatantra Party Dr Prakash Chandra Lohani have decided to meet Regmi to exert pressure on the government to withdraw the NEA board´s decision to upgrade the capacity of Trishuli 3 ´A´.
“This is a wrong decision and apparently involves huge kickbacks,” Mahat said. “We won´t let the government move ahead with the decision that would cause a loss of more than around Rs 8 billion.”
The controversial decision that was initially made by the Baburam Bhattarai-led government had received a final nod from the NEA board last week. “This indicates collusion of corrupt government officials, NEA officials and the Chinese contractor,” Mahat claimed. “The ministers involved in endorsing the decision are also involved in influencing the NEA decision.” Energy minister Uma Kant Jha, who is also the chairman of the NEA board refused to comment on the issue with Republica.
Mahat, who has remained firm against upgrading the project from 60 to 90 megawatts, categorically outlined the major reasons on why the project should not be upgraded. “First, this decision will further deepen the problem of load-shedding in the country. Second, the project would generate additional 30 megawatts electricity only during the wet season,” Mahat explained.
The run of the river project is being developed by China Gezhouba Group Co with soft loan worth US$ 89 million from the Exim Bank of China. “The contractor had agreed to upgrade the 60 megawatts project to 90 megawatts for an additional 25 percent cost. But it has now quoted an additional 50 percent cost,” said Mahat.
The Bhattarai-led government was in favor of upgrading the project after the Chinese contractor informed NEA that it would upgrade the project at the total cost of US$ 132 million.
The project was awarded to the Chinese contractor under the EPC (engineering, procurement and construction) model. EPC contractors should carry out detailed engineering design of the project, procure all equipment and materials necessary and then construct to deliver a functioning facility.
“The project variation that the NEA board has approved is against the EPC model,” Mahat said. “This is a blatant violation of the existing laws related to hydropower development.”
Earlier, the Ministry of Energy (MoE) had formed two committees to study whether it would be appropriate to upgrade the project capacity. Both the committees had suggested to the government not to upgrade the project capacity saying it would inflict huge losses to the country.
The Supreme Court, responding to a writ petition against the Bhattarai-led government´s decision to upgrade the project, had said that the NEA board would take a final decision regarding the issue. But the NEA board again sought suggestion from its management on whether or not to approve project upgradation. The NEA management had recommended upgrading the project capacity.

Cabinet puts proposal to declare four firms as sick on hold

The cabinet has put the industry ministry"s proposal to give "sick industry" status to four firms on hold, stating that the firms do not meet the criteria.
The Ministry of Industry (MoI) a few weeks ago recommended to the government to give "sick industry" status to Birat Leather, Birat Shoes, Shree Nepal Boarders and Basulingi Private Limited.
“The cabinet declined to give "sick industry" status to those firms stating that they do not meet the criteria set in Industrial Act 1992,´ an official at the MoI said. “The cabinet has put the proposal on hold.”
The Industrial Act 1992 states that only the industries which have incurred loss for five consecutive years and are still in operation shall be given "sick industry" status.
“None of the recommended four industries are in operation,” the official added.
Confirming the development, Krishna Gyawali, secretary at the MoI said the cabinet has neither endorsed the proposal not has asked the ministry for further information about the firms. “I have briefed Minister for Industry Shankar Koirala on the exact situation of the four firms,” added Gyawali.
The government"s attempt to revive sick industries had failed in the past as well due to confusion over criteria.
“This time also the cabinet couldn"t take any decision on sick industries because of the criteria,” the official at MoI said.
According to the industry ministry, a total of 37 firms had applied at the Industrial Promotion Division (IPD) to get "sick industry" status. The ministry had formed a technical committee under the leadership of chief of the IPD to conduct study on those firms.
After conducting field study and due diligence auditing of all the firms, the committee had recommended to the ministry to forward the name of four firms to the cabinet.
The government had announced programs to provide relief package to sick industries through its Immediate Relief Program 2011/12. The MoI was assigned to identify actual number of sick industries upon submission of a report in 2011 by the Sick-industries Rehabilitation High Level Task Force (SIRHLTF) that laid emphasis on revival of sick industries.

NEA mgmt for upgrading capacity of Trishuli III 'A' to 90 MW

The management of Nepal Electricity Authority (NEA) has recommended to the board of directors of NEA to upgrade capacity of Trishuli III ´A´ hydropower project to 90 MW from existing 60 MW.
“The NEA management is convinced that capacity upgradation of the project is beneficial to it. Hence, we have forwarded a recommendation for the same to the board,” Rameshwore Yadav, managing director of the NEA, told Republica.
Earlier, the government had asked the NEA management to come up with an opinion on capacity upgradation.
“We took the decision after conducting necessary discussions,” added Yadav.
Yadav submitted the recommendation to the board meeting on Sunday itself.
"The board, however, has not taken any decision on capacity upgradation,” Yadav added.
The previous government led like Dr Babu Ram Bhattarai had decided to upgrade capacity of the project. However, the move soon drew criticisms. Responding to a writ petition, the Supreme Court had later issued show cause notice to the government.
The cabinet had formally decided to upgrade the capacity of the project in the beginning of 2013. The NEA board, however, hadn´t endorsed the decision.
Following this, the government formed a committee under Moti Bahadur Kunwar, joint secretary at the Ministry of Energy (MoE), to study whether it would be appropriate to upgrade the project capacity. The committee, however, did not give any clear recommendation.
The run-of-the-river type project, which is being developed by China Gezhouba Group Co with US$ 89 million soft loan from the Exim Bank of China, will have to get nod of the NEA board for capacity upgradation.
The Bhattarai-led government stood in favor of upgrading the project after the Chinese contractor informed NEA that it can upgrade the project to 90 MW at the total cost of US$ 132 million.
"We will have to wait and see how the NEA board reacts to our recommendation," Yadav said.
According to a source at the MoE, Energy Ministry Umakant Jha, who is also the chairman of the NEA board, is in the favor of upgrading the capacity of the project. "Shanta Raj Subedi, secretary at the finance ministry, is also in the favor of capacity upgradation," the source revealed.
Earlier, the then opposition party leaders, including Dr Ramsharan Mahat of Nepali Congress and Gokarna Bista of CPN-UML, had vehemently opposed the decision to increase capacity of the project.