By Sudeshna Sarkar, IANS
Kathmandu : The fate of the deal between Nepal’s biggest hydropower project and Power Trading Corporation (PTC) of India Ltd hangs in balance once again with an NGO moving court, alleging the project would help India at Nepal’s expense.
The 750 MW West Seti project in Nepal’s underdeveloped far west region, that had been stymied for nearly a decade, is likely to be affected once again with the Kathmandu-based Water and Energy Users’ Federation Nepal (WAFED) Thursday asking the Supreme Court to stop it since it was “illegal” and went against “national interests”.
Developed by an Australian company, Snowy Mountain Engineering Corporation (SMEC), and funded by Chinese banks, the West Seti power project can transform the economy of remote and inaccessible Doti district and earn revenue for Nepal.
However, it is still being stiffly opposed by an anti-India lobby since India’s PTC has agreed to buy the total power generated. WAFED has asked the Supreme Court to stop the project, saying some of the provisions serve Indian interests.
It says SMEC’s deal with PTC is “designed to reduce power outages in India by imposing Asian Development Bank loans on Nepal instead of supplying power to Nepal”.
However, SMEC managing director William Bultitude points out that the deal with PTC was struck because it is not economically viable to use the generated power in Nepal.
Doti lacks high transmission links with Nepal’s main load centre cities and the power generation costs would go up astronomically if such links are to be established.
On the other hand, it is far easier and cheaper to sell the power to India just across the border and Nepal gets 10 percent of the $170 million annual revenue.
Besides, SMEC holds a 30-year licence and at the end, will transfer all assets to Nepal free of charge.
Though cash-strapped Nepal lacks the funds to tap its hydropower potential – which can transform its economy – and the government has been desperately seeking foreign investment, including from China and Japan, the strong anti-India sentiment has been blocking projects that would ultimately benefit the nation.
Despite nearly 14 Indian companies bidding for hydel projects in Nepal, not a single one has been given the go-ahead so far while whisper campaigns against them have been mounting.
A popular Nepali weekly this week alleged Congress president Sonia Gandhi had called up Nepal’s Prime Minister Girija Prasad Koirala to lobby for one of the bidders, Anil Ambani’s Reliance Energy.
The allegation was rebutted by the prime minister’s office Thursday.
Nepal’s media has also been alleging that Communist Party of India-Marxist (CPI-M) politburo member Sitaram Yechuri has been visiting Nepal to lobby for GMR Constructions, which is the front-runner for at least two hydropower projects.
The PTC deal, coupled with the political turmoil in Nepal, has been blocking the West Seti project since the 1990s, when PTC signed a memorandum of understanding (MoU) with Nepal to develop the project.