Speaking at the Friday Forum meeting organized by the Independent Power Producers´ Association of Nepal (IPPAN), Shyam K Upadhyaya, a hydropower expert said, “Local communities should be given priority while spending royalty which would thereby help to build goodwill of local people toward hydropower plants.” [break]
Hydropower projects pay about Rs 1 billion annually as royalty to the government. Hydropower royalty constitutes about one percent of government budget and about six percent of the non-tax revenue of the government of Nepal.
The participants said that royalty distribution process is cumbersome and time consuming in Nepal. They alleged that communities affected by the construction of hydropower projects are not getting any benefit from this royalty.
Upadhyaya, who is a consultant for IPPAN´s ongoing research project “Hydropower Royalty and Local Ownership of Hydropower Plants”, argued that consequently hydropower developers have been facing protests while constructing power plants.
As per the Local Self-governance Act and Regulations, the central government should send 12 percent of such royalty to the District Development Committees (DDCs) of the district housing hydropower plants.
Similarly, the central government distributes another 38 percent of royalty to all the districts of a development region that houses a hydropower plant.
IPPAN has said that since the government receives more than Rs 1 billion rupees in royalty and about a half billion rupees from this go the concerned DDCs, and VDCs annually, it is high time the government used it for local development.
“This is not a small amount and the VDCs and DDCs can do a lot of local development activities,” Pradeep Gangol, executive manager of IPPAN said.
The developers have also said that the process of sending royalty money to concerned VDCs and DDCs has to be made transparent and demanded that the concerned government agencies be made accountable.
“It would be better if the local communities are made aware and communicated properly about the hydropower royalty,” Gangol added.
The developers argued that if the royalty amount is spent properly at grassroots level, then local communities would compete to invite hydropower projects and they will have positive attitude towards the developers.
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