Cash-strapped West Seti closes office

KATHMANDU, Aug 11: The West Seti Hydropower Project office has been closed after the main promoter of the company Australia-based Snowy Mountain Engineering Corporation (SMEC) stopped sending funds for office operations.



"The project has not made formal announcement about the closure but promoter SMEC is not in mood to run the project," a source said.[break]



The company with more than 60 staff at the head office in Kathmandu and at the site is now squeezed to around 5 staff and the machinery and office documents have also been shifted to unknown places, according to the source. As the other important shareholders of the company, Asian Development Bank and China National Machinery and Equipment Import and Export Corporation (CIMEC) under China´s Commerce ministry did not show interest to fund the project, SMEC stopped further investment.



In the last one decade, SMEC, as the major promoter, had invested around US$ 40 million in the project. According to the source, SMEC used to provide US$ 300,000 every month which stopped several months ago.



The export-oriented 750MW project was to export 90 percent power to India and the remaining 10 percent was to be used in Nepal free of cost.



The license given to the project is valid till December 31, 2010 with additional six months of grace period. According to the source, ADB had denied to further investment in the company as there were complains about lack of public acceptance of the project and lack of good governance.



The project site is located at Doti and Dadeldhura districts. The estimated cost of the project is Rs 120 billion.

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